Court of Justice 26 March 2026, C-592/24 (Opinion of Advocate General Kokott delivered on 26 March 2026.)

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In this Opinion (Case C-592/24), Advocate General Kokott advises that Articles 49 and 54 TFEU do not preclude Italian group taxation legislation (under the TUIR) that denies a more favourable interest deductibility regime to resident subsidiaries whose non-resident parent company holds the controlled shareholdings outside Italian tax sovereignty, since such a situation is neither objectively comparable to a fully domestic group nor constitutes unjustified discrimination, but rather reflects a permissible allocation of taxing powers between Member States. The AG further opines that the freedom of establishment does not require vertical tax integration via a 'simple' permanent establishment—one that does not hold the controlled shareholdings in its business assets—and that the Court's prior case-law (SCA Holding, C-39/13 to C-41/13; B and Others, C-749/18) mandates only horizontal integration among resident subsidiaries, not integration with payments directed to a non-resident parent. On the procedural question, the AG concludes that the principles of equivalence and effectiveness do not preclude national legislation conditioning group taxation on a timely application, as no exceptional circumstances rendering compliance with the time limit unreasonable or practically impossible have been established.AI