On the internal market within the EU, freedom of establishment under articles 49 and

54 TEU stipulates that companies have the right to set up businesses in other Member

States. On the internal market there are 27 different national tax law systems which

have caused obstacles regaring taxation between Member States. These obstacles have

been shown deterrent when a company enters a new market. One problem area is the

lack of cross-border loss compensation for groups. This means that cross-border

groups is over taxed when they are unable to set of gains against losses. Within the

EU, there is a constant process trying to resolve these problems, both short and long

term. Regarding short term, the Court of Justice has presented a number of case law.

The result from these is that Member States must give groups the right to crossborder

loss compensation when the loss of the subsidiary is final. However, the case

law did not solve the problems with over taxtion, instead they created difficulties for

Member States regarding the interpretation of the cases due to the absence of a uniform

principle to follow. Swedish tax legislation within the area is narrowly designed

and allows cross-border loss compensation in few cases.

The Commission has now announced a long-term solution in the form of a directive

that means that Member States can use a Common Consolidated Corporate Tax Base.

Adoption of the directive would eliminate the obstacles whitin the internal market.

Cross-border groups would be fully recognized by being provided the opportunity to

set off gains against losses in the entire group regardless of the place of orgin.