The Discriminatory Taxation of Permanent Establishments by the Host State in the European Union: a Too Much Separate Entity Approach

This paper addresses the issue of the discriminatory taxation of permanent establishments by the Host State in the European Union. In particular, the paper seeks to demonstrate that national legislations of Member States, not allowing non-resident multinational enterprises to take into account foreign losses for the purpose of determining the profits attributable to their permanent establishments therein, generally constitute a breach of Community law. Furthermore, it suggests some possible solutions of “positive integration” to such a prohibited discriminatory treatment.