The cross-border use of losses incurred through foreign permanent establishments: wavering between the territoriality principle and the so-called «Marks & Spencer exception». The Bevola and Jens W. Trock case

In the ruling being commented on, the Court of Justice returned to the issue of compatibility with the primary law of the European Union of the limits placed by a Member State on the use of losses incurred through permanent establishments located in another member state. The application in the State of origin of an exemption regime for income made by permanent establishments set up abroad by resident entities and the suffering of definitive losses in the host State have compelled the Court of Justice to seek a balance between safeguarding the territoriality principle and the need to avoid the double non-use of losses. The Court has identified this balance in the (re)affirmation of the so-called «Marks & Spencer exception».