Ruling of EC Court on Justice on the Finnish Group Tax System

The EC Court of Justice (ECJ) gave on 18 July 2007 a preliminary ruling (C-231/05, Oy AA) on the compatibility of the Finnish Act on Intra-Group Financial Transfers (Group Contribution system) with the Community Law.

In its decision the Court considered that the Finnish system, where a subsidiary resident in Finland may deduct an intra-group transfer as an expense only if the recipient group company is resident in Finland as well, is in compliance with the Community Law.