Court of Justice 15 November 2017, C-327/16 and C-421/16 (Marc Jacob and Ministre des Finances et des Comptes publics v Ministre des Finances et des Comptes publics and Marc Lassus.)

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Advocate General Wathelet opines that Article 8 of Directive 90/434/EEC does not preclude a Member State from establishing a mechanism to defer the taxation of capital gains established at the time of a share exchange until the subsequent transfer of the securities received, even if the taxpayer has moved their tax residence to another Member State. However, the Opinion concludes that Article 49 TFEU (freedom of establishment) requires the Member State of origin to take into account capital losses arising after the exchange if such an advantage is granted to resident taxpayers, regardless of whether the subsequent transfer falls within that State's fiscal competence. The specific detailed rules for offsetting such capital losses remain a matter for national law, provided they comply with the principles of equivalence and effectiveness.AI