Consortium relief rules breach EU law

HMRC v Philips Electronics UK Ltd (Case C-18/11 - the case first to be referred to the ECJ straight from the First Tier Tribunal, back in 2009 - UKFTT 226) A UK subsidiary of non-resident link companies in a consortium claimed loss relief from the UK PE of a Netherlands subsidiary of the consortium company, and was denied due to restrictions imposed by s403D(1) ICTA 1988 (now s107 CTA 2010).  HMRC argued that the losses could be used in the Netherlands, and so could not be set against UK profits. The First Tier Tribunal held that the s403D restrictions were also EC Treaty restrictions and neither justified nor proportionate.  The case was referred to the ECJ for a decision. Stage one of the decision has been published - the opinion of the Attorney General. This isn't binding on the Court, although it does usually follow the AG's opinion  on cases.  The AG opinion agrees that the s403D restrictions are contrary to EU law: they breach the right to freedom of establishment and are neither justified nor proportionate.  The full Court decision should be published by the end of this year.