As reported in GTLN 8/2009, the Act to Combat Tax Evasion introduced additional reporting requirements on taxpayers with respect to business relations/transactions with “non-cooperative jurisdictions.” Failure to comply with the reporting obligations can result in the disallowance of a deduction for business expenses or the denial of a reduction in withholding tax.
Since the new reporting requirements only apply to transactions with non-cooperative jurisdictions, the government was expected to issue a blacklist of specific countries. However, on 5 January 2010, the German Federal Ministry of Finance (BMF) published official guidance, stating that, as from 1 January 2010, no foreign jurisdiction qualifies as a non-cooperative jurisdiction and that the BMF will publish a new decree in the future if a non-cooperative jurisdiction comes to their attention. Thus, taxpayers currently do not have to apply the new reporting obligations, but should remain alert for future changes.
