In a recently published decision of 29 January 2008, the Federal Financial Court (Bundesfinanzhof) held that the denial of cross-border loss offset concerning losses arising from tourism activities is incompatible with the EC freedom of establishment.
(a) Facts. The plaintiff is a German national and subject to unlimited tax liability in Germany. In addition to his domestic income from independent services as a masseur, he derived income from renting out caravans which had been situated …