Marks and Spencer has won a landmark ruling over the right to deduct losses from foreign operations from its British tax bill. The retailer closed down its stores in France, Germany and Belgium in 2001, and wanted to offset its losses in its home country.The case went to the European Court of Justice in Luxembourg after the UK government said firms could only deduct losses from British subsidiaries. Marks and Spencer argued the UK’s regulations went against EU rules on freedom to operate across the bloc. Judges agreed the chain could claim tax relief, but only when all possibilities to do so in the foreign countries it was trading in had been exhausted. Marks and Spencer should now be able to demand over 44 million euros back from the British government. There is expected to be political fallout from the ruling as some critics fear such decisions force EU tax harmonization by the back door.
Marks and Spencer wins landmark tax ruling