The European Commission decided, on 22 March, to refer Germany to the EU Court of Justice for excluding certain non-resident companies from the benefits of its corporation tax fiscal unity regime (Organschaft). Under German law, a company cannot be part of a fiscal unity if its registered office is outside Germany even if its place of effective management is in Germany. One of the benefits of this regime is the domestic offsetting of profits and losses within the fiscal unity in Germany. This breaches EU rules on the freedom of establishment. The Commission therefore considers that German rules disadvantage foreign companies in comparison with domestic competitors and that these companies may be deterred from establishing business in Germany.