On 29 November 2011, the European Court of Justice (ECJ) issued its ruling in the National Grid Indus case regarding the compatibility of exit taxes and the freedom of establishment. In this ruling, the ECJ ruled that levying an exit tax as such is not an infringement on the freedom of establishment, but it is not proportional to collect the exit tax immediately. Upon request of the taxpayer, collection has to be deferred until the built-in gains in the assets/liabilities are realized. Although the decision leaves some questions unanswered, the principal issue regarding the compatibility of exit taxes with European Union (EU) law is now resolved.

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