German Tax and Legal News

06.02.2012 – German Tax and Legal News

Official guidance issued on reorganizations under Reorganization Tax Act

Final guidance on the Reorganization Tax Act, published by the German tax authorities on 2 January 2012, addresses issues related to the taxation of cross-border and domestic reorganizations. The guidance comprises 170 pages and includes technical information on various topics.

06.02.2012 – German Tax and Legal News

BMF issues guidance on amended anti-treaty shopping rule

On 24 January 2012, the German tax authorities issued guidance on the interpretation of the amended anti-treaty shopping rule. The guidance may make the application process for obtaining withholding tax relief even more burdensome than in the past.

25.01.2012 – German Tax and Legal News

Write-down of shares and investment certificates depending on stock market price

The Federal Tax Court has ruled that shares in a listed company may be written down to their lower fair market value if, at the balance sheet date, the share price has declined by more than 5% compared to the acquisition costs.

25.01.2012 – German Tax and Legal News

BMF issues decree on mandatory rollover relief for asset transfers

The Ministry of Finance has published guidance on open issues relating to the mandatory rollover relief for asset transfers between different businesses of a single entrepreneur and between a partnership and its partner’s business, and vice versa.

25.01.2012 – German Tax and Legal News

New case law on capital gains taxation upon transfer of assets to foreign PE

The tax court of Cologne has ruled that the recently enacted measures to eliminate the effects of the Federal Tax Court’s decisions on the tax neutrality of cross-border transfers of assets are not in line with EU law.

25.01.2012 – German Tax and Legal News

Tax court of Cologne rules on timing of advance dividends received by majority shareholder

According to a recent decision of the tax court of Cologne, an advance dividend distribution to a controlling shareholder must be recorded in the year in which it is resolved for income tax purposes, irrespective of the due date agreed in the shareholder resolution.

25.01.2012 – German Tax and Legal News

BMF issues guidance on (non-)application of decision on cross-border loss relief

The BMF has published guidance stating that a landmark court decision regarding cross-border tax groups under the old trade tax rules should not be applied on a general basis.

25.01.2012 – German Tax and Legal News

Filing deadlines for 2011 tax returns

The tax authorities have published the official deadlines for filing the 2011 tax returns.

16.01.2012 – German Tax and Legal News

Deloitte Survey: Government Tax Audit – Stress Test

Larger enterprises face a greater risk of additional taxes after a German tax audit. This is one result of Deloitte's recent "Tax Audit Stress Test" survey. The survey also shows interesting results regarding additional taxes in relation to the size of a company’s tax departments, as well as the atmosphere during an audit. According to the survey, the acceptance of provision expenses, the valuation of fixed assets and constructive dividends are the top issues in the years under audit. In a cross-border context, the most frequent issue is failure to comply in whole or in part with the documentation rules relating to related party transactions.

19.12.2011 – German Tax and Legal News

EU Directive on Recovery of Tax Claims implemented into German law

A draft law which primarily aims at implementing the EU Directive on mutual assistance in the field of recovery of tax claims, but also makes several important changes to German tax law entered into effect in December 2011.

19.12.2011 – German Tax and Legal News

Government decides on work permit requirements for employees from Romania and Bulgaria

The government has decided to maintain restrictions on access to the German labor market for employees from Bulgaria and Romania.

19.12.2011 – German Tax and Legal News

ECJ rules Dutch exit charge infringes freedom of establishment

The ECJ has ruled that Member States may impose an exit charge on unrealized gains upon the transfer of an entity’s place of effective management to another EU Member State (National Grid Indus BV). However, such exit charge infringes the freedom of establishment if the charge has to be paid immediately.

19.12.2011 – German Tax and Legal News

Federal Tax Court holds licensing costs deductible in calculating tax to be withheld on royalty payments

The Federal Tax Court held that, based on EU law, licensing expenses incurred by an EU-based licensor are to be taken into account in determining the withholding tax on the license fee paid by a German licensee. The court overruled two previous decisions of lower tax courts.

24.11.2011 – German Tax and Legal News

Tax authority working group finds most changes to loss carryforward and group taxation rules too expensive

A working group of the BMF has concluded that it is too expensive to amend the loss carryforward and group taxation rules.

24.11.2011 – German Tax and Legal News

New case law on valuation questions in context of shareholder loans

Two recent decisions of the tax court of Münster involve valuation issues in connection with shareholder loans.

24.11.2011 – German Tax and Legal News

Court rules on requirements for tax neutral contribution of business to newly established corporation

The tax court of Baden-Württemberg has denied a tax neutral contribution of a business where the taxpayer was legally only obliged to contribute cash upon incorporation, but contributed a business shortly after the formation.

24.11.2011 – German Tax and Legal News

Tax Court rejects constitutional concerns regarding interest deduction limitation rule

The tax court of Munich rejected a taxpayer’s application for a suspension of the execution of a tax assessment on the basis of constitutional concerns relating to the interest deduction limitation rule.

08.11.2011 – German Tax and Legal News

BFH rules income from U.K.-based private equity fund exempt from German taxation

The Federal Tax Court recently ruled that income derived by German tax resident investors in a U.K.-based private equity fund is exempt from German taxation. The decision is likely to have a significant impact on the taxation of German investors in domestic and foreign private equity funds, as well as on the taxation of German-source income received by nonresident investors via private equity funds.

28.10.2011 – German Tax and Legal News

German Lower House adopts amended anti-treaty shopping rule

The German Lower House has adopted an amendment of the German anti-treaty shopping rule to bring the requirements under the anti-treaty shopping rule in compliance with EU law. An adoption by the German Upper House is currently scheduled for 25 November 2011.

27.10.2011 – German Tax and Legal News

E-invoicing simplifications

The German Parliament has approved a draft bill that includes simplified rules for e-invoicing as foreseen by the EU VAT Directive.

27.10.2011 – German Tax and Legal News

German WHT on dividends paid to EU/EEA minority shareholders violates free movement of capital

The European Court of Justice has ruled that German withholding tax on outbound dividends paid to foreign (EU/EEA) corporations violates the free movement of capital provisions in the Treaty on the Functioning of the European Union and the EEA Agreement.

27.10.2011 – German Tax and Legal News

BFH rules on beneficial ownership in transfer of shareholdings

The Federal Tax Court has ruled on when beneficial ownership in shares passes from one shareholder to another.

27.10.2011 – German Tax and Legal News

E-Tax Balance Update

The Ministry of Finance has released the final application decree for the E-Tax Balance Sheet and published the final general taxonomy and the final special taxonomies.

27.10.2011 – German Tax and Legal News

BMF publishes guidance on minimum tax rules in context of changes in ownership and reorganizations

The tax authorities have published guidance regarding the granting of a suspension of the execution in cases where the minimum tax rules, together with change-in-ownership rules or rules on reorganizations, lead to a final elimination of loss carryforwards.

27.10.2011 – German Tax and Legal News

Infringement procedure against Germany regarding rollover relief provision

The European Commission has initiated the second step of the infringement procedure to require Germany to amend its rule on rollover relief for certain assets.

29.09.2011 – German Tax and Legal News

BFH rules on tax treatment of handling fees for loan agreements

The Federal Tax Court has ruled on when handling fees on a loan agreement may be treated as immediately deductible business expenses, rather than be expensed over the term of the loan.

29.09.2011 – German Tax and Legal News

Tax Court of Munich rules on hive-down of pension liabilities and pension assets

The Tax Court of Munich has ruled that single assets may be contributed to a corporation with retroactive effect, and pension liabilities that are transferred with pension assets must be valued at their net present value (rather than their lower tax value) and can be recorded at this value on subsequent balance sheet dates.

29.09.2011 – German Tax and Legal News

AG Kokott’s opinion in Dutch exit tax case published

Based on the opinion of Advocate General Kokott in a Dutch case, which may also be relevant to German taxpayers, exit taxes levied upon the migration of a company to another EU Member State may constitute an infringement of EU law in cases where assets can be easily traced.

29.09.2011 – German Tax and Legal News

Tax Court of Lower Saxony rules on former anti-debt pushdown rule

The Tax Court of Lower Saxony has held that indirect share acquisitions did not trigger the anti-debt-pushdown rule in effect until 2007, according to which interest expense incurred in connection with leveraged intra-group share acquisitions were nondeductible.

29.09.2011 – German Tax and Legal News

Tax Court of Münster rules on recognition of disproportionate profit distributions

The Tax Court of Münster has confirmed that tax abuse generally will not be presumed in the case of a disproportionate profit distribution, i.e. where a profit distribution benefits certain shareholders and deviates from the proportion that the shareholder’s shareholding bears to the total stated share capital.

23.08.2011 – German Tax and Legal News

Germany: E-Tax Balance Sheet on the way!

The German tax authorities have clarified details of the Electronic Tax Balance Sheet, and these are likely to be implemented into the final decree expected by the end of September.

23.08.2011 – German Tax and Legal News

Decree clarifies application of RETT exemption for intragroup restructurings

The tax authorities have clarified that only the top level entity in the ownership chain constitutes the controlling enterprise within the meaning of section 6a of the RETT Act.

23.08.2011 – German Tax and Legal News

Federal Tax Court rules on classification of partnership income in German-Hungarian cross-border situation

The Federal Tax Court has rejected the view that, for tax treaty purposes, the classification of a partnership in the partner’s state of residence should follow the view taken by the partnership’s residence state. This view was supported in the OECD Partnership Report.

23.08.2011 – German Tax and Legal News

Federal Tax Court rules on applicability of extended trade tax deduction for group companies

The Federal Tax Court has disallowed the application of the extended trade tax deduction in a case in which a company rented real estate to a sister company that belonged to the same trade tax group.

23.08.2011 – German Tax and Legal News

New developments on loss carryforward by ailing companies

Following the European Commission’s decision earlier this year that the financial restructuring exception in German law constitutes unlawful state aid and all advantages granted under the scheme will have to be recovered, Germany and one company that previously benefitted from the regime have brought an action for annulment, and the Fiscal Court of Münster has granted interim relief in a case where tax prepayments have been assessed due to the non-application of the financial restructuring exception.

28.07.2011 – German Tax and Legal News

Guidance published on tax consequences of assumption of debt versus indemnification from debt

The Federal Ministry of Finance has published guidance on the tax consequences of an assumption of liabilities and indemnification obligations.

28.07.2011 – German Tax and Legal News

BGH denies guaranteed dividend of (former) minority shareholder following squeeze-out

The Federal Civil Court has denied a minority shareholder entitlement to a guaranteed dividend because a squeeze-out was registered before the annual general meeting for the year for which the dividend was to be paid.

28.07.2011 – German Tax and Legal News

BFH rules on treaty qualification of German partnership deemed to be trading under domestic law

The Federal Tax Court has confirmed that a partnership deemed to be trading under domestic tax law and that only engages in minimal business activities should not qualify as a permanent establishment for tax treaty purposes.

28.07.2011 – German Tax and Legal News

Solidarity surcharge levied until 2007 in line with German constitution

According to the BFH, the German solidarity surcharge levied up until 2007 is in compliance with the German constitution.

28.07.2011 – German Tax and Legal News

Government proposes amendment to anti-treaty shopping rule

The German government is considering an amendment to the anti-treaty shopping rule in response to the infringement proceedings initiated by the European Commission.

28.07.2011 – German Tax and Legal News

Tax court rules local tax office competent to grant abatement of trade tax for qualifying financial restructuring

Contrary to guidance issued by the tax authorities on tax relief in qualifying financial restructuring situations, the tax court of Düsseldorf has held the local tax office is competent to grant an abatement of trade tax in these situations.

28.07.2011 – German Tax and Legal News

Tax court of Munich clarifies legal remedies for negative binding ruling from tax authorities

The tax court of Munich has confirmed that a taxpayer may resort to the judicial system where the tax authorities do not issue an advance ruling or issue a negative ruling. However, the courts will only review whether the tax authorities acted within the scope of their discretionary power.

28.07.2011 – German Tax and Legal News

Scheuten Solar Technology and other developments affecting the trade tax add-back of interest

Two recent court decisions – one by the ECJ and one by the BFH – may have an impact on the application of the add-back of interest expense under German trade tax rules and may potentially even have more far-reaching implications.

30.06.2011 – German Tax and Legal News

Reform of the German Reorganization Act resolved

The Parliament has resolved issues relating to the reform of the Reorganization Tax Code, which aims at reducing administrative burdens in connection with reorganizations and implementing certain changes required by EU law.

30.06.2011 – German Tax and Legal News

Federal Tax Court denies tax group in case of atypical silent partnership at level of group subsidiary

The Federal Tax Court has ruled that an effective tax group for income tax purposes requires the transfer of the entire profit by the subsidiary to its parent company and this requirement is not met where a portion of the subsidiary’s profits is allocated to an atypical silent partner.

30.06.2011 – German Tax and Legal News

RETT triggered upon acquisition of shares can be deducted immediately

In a landmark decision, the Federal Tax Court has held that – contrary to the view of the tax authorities – the RETT triggered by an acquisition of 95 % or more of the shares in a real estate-owning entity should be treated as an immediately deductible business expense.

30.06.2011 – German Tax and Legal News

Federal Tax Court rejects application of ECJ case law to U.S. residents under Germany-U.S. Friendship Treaty

The Federal Tax Court ruled that the principles of the ECJ decision in the Gerritse case cannot be extended to U.S. residents based on the nondiscrimination article of the Germany-U.S. tax treaty or on the basis of the Friendship Commerce and Navigation Treaty between the two countries.

30.06.2011 – German Tax and Legal News

Federal Tax Court rules on applicability of trade tax exemption for real estate companies

The Federal Tax Court has rejected an application for a trade tax exemption for real estate companies in a case in which a department store was leased along with certain fixtures and fittings, and the court has clarified the criteria under which the leasing of fixtures and fittings may be allowed.

27.05.2011 – German Tax and Legal News

Draft guidance issued on reorganizations under Reorganization Tax Act

More than five years after the reform of the Reorganization Tax Act, the tax authorities have issued comprehensive draft guidance on legal reorganizations.

27.05.2011 – German Tax and Legal News

Change-in-ownership rule unconstitutional?

The local tax court of Hamburg submitted the question of whether the change-in-ownership rule constitutes an infringement of the German constitution to the Federal Constitutional Court.

27.05.2011 – German Tax and Legal News

BFH rules on discounting of shareholder loans

The BFH has confirmed its view that loans granted without a certain repayment date must be discounted for tax purposes as if they had been granted for an indefinite period of time.

27.05.2011 – German Tax and Legal News

Local tax court rules on inapplicability of participation exemption on share sales by finance companies

The Lower Tax Court of Hamburg has elaborated on the conditions under which the 95 % tax exemption for dividends and capital gains arising from the sale of shares are denied to corporate investors.

27.05.2011 – German Tax and Legal News

Lower tax court of Munich rules on deduction of business expenses for reinstating liability under return to good fortune clause

The lower tax court of Munich has denied a deduction for business expenses generated by the reinstatement of liability under a return to good fortune clause in a case in which the shares in the debtor company are transferred together with the latent loan receivable.

27.05.2011 – German Tax and Legal News

BFH confirms admissibility of charging fee for binding rulings

The BFH has expressed its opinion that the obligation to pay a fee for a tax ruling does not violate constitutional law.

27.05.2011 – German Tax and Legal News

Germany not convinced of benefits of CCCTB Draft Directive

German tax officials have suggested that Germany may not be willing to introduce an optional common consolidated corporate tax base because of a feared loss of tax revenue; instead, Germany may prefer a mandatory common corporate tax base.

27.05.2011 – German Tax and Legal News

ECJ Advocate General considers Trade Tax rules on add-back of interest payments compatible with Interest and Royalties Directive

ECJ Advocate General Sharpston has recommended that the ECJ rule that the 50 % add-back of interest payments on long-term loans is in line with the EU Interest and Royalties Directive. If the ECJ does not follow the Advocate General’s opinion, the impact on interest deduction limitation rules throughout Europe could be far-reaching.

25.05.2011 – German Tax and Legal News

Lower Tax Court of Berlin-Brandenburg rules on applicability of extended trade tax deduction for group companies

Real property letting between affiliated companies in the same tax group could lead to a disallowance of the extended trade tax deduction.

25.05.2011 – German Tax and Legal News

Federal Ministry of Finance issues decree on rental income derived from German real property

The tax authorities have issued guidance on the tax treatment of income derived by foreign investors holding real property in Germany.

26.04.2011 – German Tax and Legal News

Lower Tax Court rules on recognition of subordinated liabilities in tax balance sheet

The lower court of Munich has ruled that a subordinated shareholder loan should be recognized in the tax balance sheet even though the subordination agreement only refers to a repayment from future profits or liquidation proceeds and not specifically to a repayment from other free net assets.

26.04.2011 – German Tax and Legal News

Higher Regional Court Düsseldorf confirms validity of Swiss notarial recordings on transfer of shares in German GmbH

The OLG Düsseldorf has ruled that a notarial deed on the transfer of shares in a German GmbH recorded by a Swiss notary public in Switzerland is valid and enforceable from a German perspective.

26.04.2011 – German Tax and Legal News

Dual resident EU/EEA company permitted to form Organschaft with German parent

According to official guidance published on 28 March 2011, a dual resident EU/EEA entity with its place of management and control in Germany can be a subsidiary in a German Organschaft. The circular is in response to pending infringement procedures by the European Commission.

26.04.2011 – German Tax and Legal News

Increased gift tax exposure in case of deemed divided distributions

The tax authorities have updated the inheritance and gift tax regulations to address the gift tax consequences of non-arm’s length transactions between a company and its shareholders or parties related to the shareholders.

26.04.2011 – German Tax and Legal News

Lower Tax Court rules that retroactive change to tax treatment of interest on refunds does not violate constitutional law

The lower tax court of Münster has ruled that an amendment to the rules governing interest on tax refunds based on a retroactive change of the tax law does not violate German constitutional law.

30.03.2011 – German Tax and Legal News

Government disagrees with Commission decision on financial restructuring exception

The German government is requesting an annulment of the European Commission decision that the financial restructuring exception constitutes state aid.

30.03.2011 – German Tax and Legal News

Lower tax court rules tax loss carryforwards not forfeited in all change in ownership cases

The Lower Tax Court of Münster has ruled that a tax loss available at the end of the financial year before a change in ownership may be offset against the positive income generated during the financial year in which the change in ownership takes place.

30.03.2011 – German Tax and Legal News

Government initiates reform of insolvency law

The Federal Cabinet has passed a draft bill that would reform the German insolvency law in order to facilitate the financial restructuring of enterprises facing a crisis.

30.03.2011 – German Tax and Legal News

ECJ to rule on VAT treatment of portfolio management services

The BFH has asked the ECJ to rule on whether the selling and buying of securities for and on behalf of an individual investor by a bank and other asset managers are subject to VAT.

30.03.2011 – German Tax and Legal News

BFH rules on tax treatment of sales price receivable write off following a share transfer

The impairment / write-off of a sales price receivable for a share transfer leads to a retroactive adjustment of the initial capital gain.

30.03.2011 – German Tax and Legal News

Lower tax court rules on depreciation method in partner and partnership’s tax balance sheets

The Lower Tax Court of Lower Saxony has ruled that the depreciation term in a partner’s supplementary tax balance sheet should correspond to the tax balance sheet of the partnership.

30.03.2011 – German Tax and Legal News

BFH rules on application of GAAR in connection with mutual sale and acquisition of shares

The mutual sale and acquisition of the shares of a GmbH between individuals in order to tax effectively realize capital losses has been held not to be abusive.

30.03.2011 – German Tax and Legal News

BFH rules interest payments on profit participating loans exempt under treaty with U.S.

The BFH has held that interest payments on profit participation loans made to a German creditor are exempt under the Germany-U.S. tax treaty. While the Ministry of Finance has announced the decision is generally applicable, it notes that under the revised treaty, the credit method rather than the exemption method may apply in cases where the payments are not taxable in the hands of the recipient in the U.S.

30.03.2011 – German Tax and Legal News

BFH rules on relationship between sale of shares/investments and input VAT recovery

The BFH has disallowed an input VAT deduction on consulting services in relation to a sale of shares by a seller that otherwise engages in activities qualifying for an input VAT credit.

30.03.2011 – German Tax and Legal News

Lower Tax Court rules on provisions for costs related to future tax audit for large companies

The Lower Tax Court of Baden-Württemberg has ruled that a large company must set up a provision for costs related to a future tax audit even if a tax audit has not yet been announced.

22.03.2011 – German Tax and Legal News

BFH rules on claw-back of capital allowances under U.K. law

The Federal Tax Court has held that capital gains arising from the sale of U.K. real property held by a German resident taxpayer may be taxed in Germany if the taxpayer is only subject to tax in the U.K. on a claw-back of capital allowances.

22.03.2011 – German Tax and Legal News

Participation in pure asset managing partnership harmful for trade tax privilege

The Federal Tax Court has denied the application of the extended trade tax deduction for a GmbH that is a non-managing general partner in a pure asset managing KG.

22.02.2011 – German Tax and Legal News

Germany signs new tax treaty with Spain

A new tax treaty between Germany and Spain, signed on 3 February 2011, is in line with the latest version of the OECD Model Tax Convention.

22.02.2011 – German Tax and Legal News

European Commission finds German rule on loss carryforwards by ailing companies unlawful state aid

The European Commission has ruled that the financial restructuring exception to the restriction on loss carryforwards constitutes unlawful state aid and all advantages granted under this scheme since 1 January 2008 will have to be recovered.

22.02.2011 – German Tax and Legal News

Local tax court rules on tax effective write-down of quoted bonds

The local tax court of Münster has issued a decision on the prerequisites for a tax effective write-down of bonds held as current assets.

22.02.2011 – German Tax and Legal News

Local tax court of Saxony rules on joint contribution of two operating businesses by single taxpayer

In the case of a tax neutral contribution of more than one business into a corporation against new shares, a positive and a negative tax equity of each business may be offset if the contributions are made by the same person in a uniform transaction.

22.02.2011 – German Tax and Legal News

Capital gains liability triggered due to disproportionate merger

A merger where shares in the receiving entity are allocated disproportionately to the fair market value of the shares contributed may trigger capital gains according to the BFH.

03.02.2011 – German Tax and Legal News

Local tax court of Rheinland-Pfalz questions EU law compatibility of German exit taxation rules

The local tax court of Rheinland-Pfalz has suspended the execution of an exit tax assessment on a corporation that relocated from Germany to Austria on the grounds that the immediate taxation of the exit gain constitutes an infringement of EU law.

27.01.2011 – German Tax and Legal News

Local tax court of Cologne rules on trade tax addback for rental payments

The local tax court of Cologne holds that the trade tax addback of rental expenses should apply to the gross rental expense even where the real property is sublet to tenants.

27.01.2011 – German Tax and Legal News

E-Tax Balance Sheet trial period begins 1 February 2011

A three-month voluntary trial period will start on 1 February 2011 to evaluate the practical aspects of the new E-Tax Balance Sheet.

27.01.2011 – German Tax and Legal News

BFH rules on application of German CFC rules to companies that outsource business activities to related management company

The Federal Tax Court has confirmed that the CFC rules do not necessarily apply where a foreign (insurance) company has outsourced all of its business activities to a related management company via a management and services agreement.

27.01.2011 – German Tax and Legal News

BFH rules on tax consequences of employee stock option plans

The Federal Tax Court has confirmed the tax authorities’ view that a German company that granted stock options to its employees should not incur tax deductible personnel expenses if the awards are satisfied by newly issued shares.

27.01.2011 – German Tax and Legal News

Local tax court of Düsseldorf rules on transfer of trade tax loss carryforwards following collapse merger of partnership

The local tax court of Düsseldorf has ruled that the trade tax loss carryforwards of a partnership can be transferred to the partner by way of a collapse merger and that they continue to exist even if the partnership’s former business is sold after the collapse merger.

27.01.2011 – German Tax and Legal News

Pre-2004 thin capitalization rules violate nondiscrimination principle in relation to Switzerland

The BFH has held that Germany’s pre-2004 thin capitalization rules constituted an infringement of the nondiscrimination principle in the tax treaty with Switzerland.

27.01.2011 – German Tax and Legal News

BFH rules on validity of PLPA requirement for German tax group

A PLPA is not duly executed if the German GAAP profit transferred by a subsidiary to its parent company is not reduced by an existing loss carryforward. As a result, an Organschaft will not be recognized.

27.01.2011 – German Tax and Legal News

Outlook for 2011 – Recently implemented and announced tax measures

This article highlights a number of recent tax developments in Germany.

27.01.2011 – German Tax and Legal News

Local tax court of Düsseldorf rules on tax-effective write down of receivable derived from sale of shares

The local tax court of Düsseldorf has held that the tax-exempt capital gain from the sale of shares is reduced by the write-down of the receivable derived from the sale of shares effected in a year following the year of the sale.

16.12.2010 – German Tax and Legal News

Local tax court rules on discounting of loans

The tax court of Muenster has confirmed that loan agreements must be examined from an economic perspective to determine whether a loan is non-interest-bearing under German law.

16.12.2010 – German Tax and Legal News

Real Estate Transfer Tax exemption for intragroup restructurings clarified

The tax authorities have issued a long-awaited decree that clarifies intragroup restructurings that fall within the scope of the exemption to the Real Estate Transfer Tax.

16.12.2010 – German Tax and Legal News

Appellate Court denies merger of sole general partner-GmbH with limited partnership

The Appellate Court in Hamm has held that a general partner cannot not be merged into the limited partnership of which it is a general partner because the partnership would cease to exist after the merger.

16.12.2010 – German Tax and Legal News

Lower tax court rules on relevance of licensing costs in calculating tax to be withheld on royalty payments

The lower tax court of Munich has held that royalty payments made by a foreign licensor in connection with licensing income may not be taken into account in determining the tax base for withholding tax purposes.

16.12.2010 – German Tax and Legal News

Annual Tax Act 2010 in effect

The Annual Tax Act 2010 was published on 13 December 2010 and is now in effect.

16.12.2010 – German Tax and Legal News

Local tax court of Cologne rules on qualification of due diligence costs as acquisition costs

The local tax court of Cologne held that due diligence costs for the acquisition of companies generally qualify as acquisition expenses that must be capitalized because a general decision to acquire the entity typically already has been made once an advisor is engaged to carry out the due diligence.

16.12.2010 – German Tax and Legal News

BFH rules on treaty characterization of royalties from partnership to foreign partner

The BFH has significantly reduced the scope of an anti-abuse rule designed to ensure that payments made by a partnership to its nonresident partner should be subject to tax in Germany as business profits under an applicable tax treaty.

16.12.2010 – German Tax and Legal News

New case law on retroactive establishment of tax group

Two recent court decisions confirm that, contrary to the view of the tax authorities, tax groups may be established even with respect to reorganizations that are carried out with retroactive effect.

16.12.2010 – German Tax and Legal News

E-Tax Balance Sheets on the way

New rules will oblige companies to submit all company tax returns electronically.

24.11.2010 – German Tax and Legal News

Lower House of Parliament adopts Annual Tax Act 2010

The Annual Tax Act 2010, adopted by the Lower House of Parliament in October 2010, includes important changes to the exit tax rules, the calculation of built-in gains under the change-in-ownership rule and the rules on the transfer of bookkeeping abroad. The Act is expected to be discussed by the Upper House by the end of November.

24.11.2010 – German Tax and Legal News

Constitutional Court rules 5% add-back under participation exemption is compatible with Constitution

The Federal Constitutional Court has confirmed that the participation exemption rules, under which5 % of dividends and capital gains are included in the tax base as deemed nondeductible business expenses, are in line with the Constitution even if a taxpayer actually incurred lower business expenses on the relevant shareholding.

24.11.2010 – German Tax and Legal News

BFH rules on retroactive establishment of Organschaft

Although the Federal Tax Court has ruled that a tax group can be established with retroactive effect in certain reorganizations, it is unclear whether this decision will impact the position to be adopted by the tax authorities in upcoming guidance to the Reorganization Tax Act.

24.11.2010 – German Tax and Legal News

Tax courts question legality of minimum taxation rule

German tax courts have reached different conclusions as to whether the minimum tax rules are compatible with the principles of the Constitution.

27.10.2010 – German Tax and Legal News

Results of Deloitte survey: German Income Tax Audits

As countries seek to increase tax revenue in the wake of the global financial crisis, enforcement measures, including tax audits, have received renewed and increased attention. This is also the case in Germany where tax audits have historically played a significant role in the overall taxation and tax revenue collection process. Deloitte Germany recently conducted a web-based survey on the income tax audit experiences of German inbound investors and the results are now available.

27.10.2010 – German Tax and Legal News

Deadline for electronic filing of EU VAT refund claims for 2009 extended to 31 March 2011

The deadline for filing EU VAT refund claims for FY 2009 has been extended to 31 March 2011 because of technical difficulties with the web applications through which such refunds are requested.

27.10.2010 – German Tax and Legal News

BFH rules on recovery of input VAT on transaction costs in relation to issuance of bearer bonds/coupon bonds

The Federal Tax Court has ruled that a first time issuance of bearer bonds/coupon bonds – similar to the first time issuance of shares in a company – is a non-taxable event for VAT purposes.

27.10.2010 – German Tax and Legal News

New infringement proceedings relating to Organschaft rules

The EU Commission has formally requested that Germany allow tax groups involving dual resident subsidiaries that are treated as German resident under domestic law and a provision in an applicable tax treaty.

27.10.2010 – German Tax and Legal News

BFH clarifies profit attribution to retiring partner of partnership

The Federal Tax Court has ruled that the profits attributable to the retiring partner of a partnership that has a financial year deviating from the calendar year must be taxed in the year of the retirement rather than in the year in which the financial year of the partnership ends.

27.10.2010 – German Tax and Legal News

Trade tax on sale of partnership interest by corporation in line with Constitution

The Federal Tax Court has confirmed that a capital gain derived by a corporate partner from the sale of a partnership interest is subject to trade tax at the level of the partnership. The relevant rule in the Trade Tax Code does not violate the German Constitution.

29.09.2010 – German Tax and Legal News

BFH rules on conditions for tax neutral contribution of partnership interest to corporation

The Federal Tax Court has ruled that the contribution of a partnership interest to a corporation can be tax neutral where the shares of the corporation are issued in return for a cash payment into the paid-in-capital, and the contribution of the partnership interest, in addition to the cash payment, is made by way of share premium (Agio).

29.09.2010 – German Tax and Legal News

BFH rules on tax relief for cancellation of debt income

The Federal Tax Court has ruled that tax relief for the cancellation of debt income does not need to be granted in certain cases based on official guidance issued by the Federal Ministry of Finance. However, the decision also confirms that the tax authorities can grant tax relief if the facts of the case fall within the scope of the guidance.

29.09.2010 – German Tax and Legal News

BFH rules treaty participation exemption supersedes add-back for trade tax

The Federal Tax Court has ruled that a dividend is not subject to trade tax where a tax treaty provides for a participation exemption, even if the requirements for the participation exemption under the trade tax rules are not met.

29.09.2010 – German Tax and Legal News

BFH rules on tax treatment of interest income resulting from tax refunds

The Federal Tax Court has issued a decision changing its position on the tax treatment of penalty interest for individual income tax purposes. As a result, interest on late tax payments and tax refunds is no longer treated similarly for corporate and individual income tax purposes.

29.09.2010 – German Tax and Legal News

BFH clarifies formal requirements for wording of loss absorption provision in PLPAs

The Federal Tax Court has issued a decision that clarifies the wording that is required for the loss absorption rule in a profit and loss pooling agreement.

20.09.2010 – German Tax and Legal News

RETT rates increased in several federal states

Several federal states have decided to increase the real estate transfer tax (RETT) rate as from 2011 and 2013; the rate increases will affect real property transferred in a sale or reorganization and share acquisitions.

20.09.2010 – German Tax and Legal News

Court rules on retroactive extension of holding period for tax-exempt sale of real property

The Federal Constitutional Court has ruled that the extension of the holding period for a tax-exempt sale from two years to 10 years as from 1999 violates the constitutional ban on retroactive legislation in cases where two-year period has already expired. The general extension to 10 years, however, is in line with the Constitutional Law.

20.09.2010 – German Tax and Legal News

Local tax court of Muenster grants suspension of execution for RETT assessment on constitutional grounds

The local tax court of Muenster has confirmed that the equality provisions of the German Constitution with respect to the Inheritance and Gift Tax Act also should apply to RETT assessments.

24.08.2010 – German Tax and Legal News

BGH revises position on cash compensations for squeeze-outs

The BGH has ruled on the reference periods for the weighted stock average when determining the amount of cash compensation paid to minority shareholders in a squeeze-out. The court gave up its previous view that the date of the shareholders’ resolution is relevant for calculating the cash compensation and now takes the view that the three months period prior to an announcement of a structural measure is decisive.

24.08.2010 – German Tax and Legal News

Local tax court rules on timing issues for financial integration of controlled entity in German tax group

The local tax court of Saxony has confirmed that the head of a German tax group must continuously hold the majority of the voting rights in the controlled entity for the entire fiscal year of the controlled entity and that the existence of such a financial integration is based on actual facts rather than legal circumstances, which is why it cannot be established in a transaction with retroactive effect for German tax purposes.

24.08.2010 – German Tax and Legal News

BMF withdraws decree on tax treatment of treasury stock / share buy-backs

The BMF has changed its position that a share buy-back should be treated as an acquisition from the perspective of the acquiring company and as a sale from the perspective of the selling shareholder.

24.08.2010 – German Tax and Legal News

Federal Tax Court rules on cross-border loss relief for losses from EU permanent establishments

The Federal Tax Court has ruled on practical issues arising in EU permanent establishment cross-border loss relief cases. The cases involved the questions (i) whether final losses occur upon a forfeiture of tax loss carryforwards under general temporal limitation rules in the PE-state or upon a termination of a PE with not yet exhausted tax loss carryforwards, (ii) in which year a final loss must be recognized in the country of residence and (iii) whether these losses are effective for trade tax purposes.

24.08.2010 – German Tax and Legal News

Local tax court of Cologne rules on procedural aspects of withholding tax refund claims (“Gaz de France”)

In the Gaz de France case, the taxpayer failed to obtain relief from German withholding tax on dividends under the Parent-Subsidiary Directive because a French S.A.S. was not considered to be covered by the Directive. The local tax court of Cologne now has rejected a taxpayer’s claim for a refund of withholding tax based on the fundamental freedoms in the EU Treaty and has held that the Federal Tax Office is not the competent authority to resolve such claims.

24.08.2010 – German Tax and Legal News

Annual Tax Act 2010 may amend exit tax rule for cross-border asset transfers

The latest draft of the Annual Tax Act 2010 contains an amendment to the existing exit taxation rules concerning the transfer of assets to foreign permanent establishments. Based on the draft law, the transfer of assets held by a German corporation or partnership to a foreign permanent establishment, the transfer of a business abroad and cross-border migrations of corporations should trigger exit taxation on the full built-in gains.

27.07.2010 – German Tax and Legal News

Buildings not constructed on own land must be depreciated like own buildings

The owner of a building that is not constructed on its own land is not allowed to take the shorter period of the right to use the land into account in computing depreciation. Instead, the standard depreciation periods of 33.33 or 50 years apply.

27.07.2010 – German Tax and Legal News

Federal Fiscal Court rules on treatment of lease guarantee in connection with property acquisition

If a seller of leased property guarantees certain lease income in connection with an existing lease and, if the amount guaranteed under the lease guarantee is not met by payments under the existing lease agreement, the compensation paid under the lease guarantee reduces the purchase price of the property.

27.07.2010 – German Tax and Legal News

BFH comments on definition of “independent business division” for reorganization purposes

The BFH has upheld its past case law that a tax neutral demerger is possible only if all business assets necessary to carry out the demerged business are transferred to the receiving entity. The BFH overturned a previous taxpayer friendly decision of the local tax court of Saxony.

27.07.2010 – German Tax and Legal News

Tax court of Düsseldorf confirms restrictions on interest deductibility for partnerships in corporate groups

In two published decisions, the local tax court of Düsseldorf has confirmed that the German rule which limits deductibility of interest expense at the partnership level based on the presumption that the partner has made “excess withdrawals” from the partnership also applies to partnerships in corporate groups.

27.07.2010 – German Tax and Legal News

BMF issues more guidance on tax treatment of certain cost items for production costs

The BMF has published guidance on the German GAAP and tax treatment of certain cost items for purposes of the production costs of assets, which temporarily eases the effects of official guidance published in March.

27.07.2010 – German Tax and Legal News

New decision on cross-border loss relief between corporations

The local tax court of Rheinland-Pfalz has ruled on the second case of cross-border loss utilization between corporations. As in the case decided by the tax court of Lower Saxony, the court rejected the claim for a loss deduction. Both cases are now pending before the Federal Tax Court.

26.07.2010 – German Tax and Legal News

German lower tax court rules on withholding tax on royalties in an EC law context

In a recently published decision the tax court of Lower Saxony ruled that an outgoing royalty was not an expense which was directly linked to German royalty income so that it would not have to be considered when levying withholding tax.

01.07.2010 – German Tax and Legal News

New guidance issued on anti-treaty shopping rule

The German Ministry of Finance has published additional guidance on the German anti-treaty shopping rule which largely confirms existing guidance but also includes some taxpayer-friendly amendments.

24.06.2010 – German Tax and Legal News

Federal Fiscal Court confirms residence country taxation of interest income from rental profits in cross-border situations

Following several decisions by the local tax courts, the Federal Fiscal Court has confirmed that a deemed trading partnership will not be regarded as a business for tax treaty purposes. Therefore, interest income is taxable in the country where the recipient is resident even if it arises from a cash surplus as a result of property leasing activities in the other state.

23.06.2010 – German Tax and Legal News

Court queries constitutionality of limited offset of loss carryforwards (“minimum taxation”)

The tax court of Nuremberg has questioned whether the German minimum tax rules are in line with the Constitution in cases where the losses are subsequently eliminated under the change-in-ownership rule or the rules on reorganizations.

23.06.2010 – German Tax and Legal News

Germany referred to ECJ for discriminatory dividend taxation to nonresident pension institutions

The European Commission has decided to refer Germany to the ECJ with respect to the tax treatment of dividends paid to nonresident pension institutions.

23.06.2010 – German Tax and Legal News

BFH rules on forfeiture of trade tax loss carryforwards in multiple tier partnerships

The BFH has held that in a two tier partnership structure, the collapse of the upper tier partnership into its partner because of a merger of its partners, constitutes a harmful change in the partners of the lower tier partnership and therefore led to an elimination of the losses in the lower tier partnership.

23.06.2010 – German Tax and Legal News

Lower tax court publishes first decision on interest deduction limitation rule

The tax court of Lower Saxony has ruled on the calculation of the harmful shareholder financing threshold under the equity ratio comparison test under the interest deduction limitation rule and questioned whether the tax authorities’ approach is in line with the law.

23.06.2010 – German Tax and Legal News

Recent court decisions on requirements for list of shareholders of GmbH under current law

The German GmbHG requires that a list of shareholders be submitted to the commercial register at the time of incorporation and upon each change in shareholders. German courts have issued several decisions on practical questions relating to the shareholder list.

23.06.2010 – German Tax and Legal News

BFH rules on tax group with trade tax-exempt parent company

The BFH has ruled that the trade tax exemption of the head of a German tax group does not apply to non-exempt income transferred under a profit and loss pooling agreement from one of its subsidiaries.

28.05.2010 – German Tax and Legal News

Finance Court of Baden-Württemberg: Trade tax privilege for real estate holding companies not available if property not owned at the beginning of the calendar year

The Finance Court has ruled that the extended trade tax deduction is restricted to income arising from property that is owned at the beginning of the calendar year for which the trade tax is assessed.

28.05.2010 – German Tax and Legal News

Finance Court of Düsseldorf: Real Estate Transfer Tax on unification of shares in fiscal unity must be capitalized as additional cost for shares

The Finance Court has confirmed the position of the tax authorities, holding that RETT triggered on the unification of shares in a real estate owning company in the hands of a fiscal unity for RETT purposes will be treated as an additional acquisition cost for the shares, although this position has been challenged in the prevailing tax technical literature.

26.05.2010 – German Tax and Legal News

BMF issues decree on treatment of partnerships under tax treaties

The BMF has published guidance on the tax treatment of partnerships under tax treaties. The guidance summarizes the current positions of the tax authorities, but also includes some controversial positions that may give rise to litigation.

26.05.2010 – German Tax and Legal News

VAT refund claims in Germany for EU and non-EU entrepreneurs

Non-EU businesses that are not registered for VAT purposes in Germany and that intend to reclaim VAT incurred in Germany in 2009 need to do so by 30 June 2010. For EU businesses, the deadline is 30 September 2010.

26.05.2010 – German Tax and Legal News

Financial restructuring privilege under change-in-ownership rules suspended

The German BMF has responded to the European Commission’s state aid investigations into the financial restructuring privilege under the German change-in-ownership rule. According to new guidance, the application of the financial restructuring privilege will be suspended until the state aid investigations are completed.

26.05.2010 – German Tax and Legal News

Local tax court of Munich rules on tax consequences of employee stock option plan

The local tax court of Munich has confirmed the tax authorities’ view that a German company that grants stock options to its employees should not incur tax deductible personnel expenses if the awards are satisfied by newly issued shares.

26.05.2010 – German Tax and Legal News

Local tax court rules on failure to comply with tax authorities’ information request during a tax audit

The local tax court of Schleswig-Holstein has held, in proceedings for the suspension of execution, that a penalty introduced along with the rules for the transfer of electronic bookkeeping abroad could be applied in a regular tax audit and other cases if the taxpayer fails to timely submit documentation requested by the tax authorities.

26.05.2010 – German Tax and Legal News

District Court raises doubts on validity of notarial recordings of transfers of GmbH shares in Switzerland

A decision of the district court of Frankfurt a.M. has resulted in increased uncertainties as to whether notarial recordings outside of Germany would be legally valid after the revision of the German Limited Liability Companies Act in November 2008.

26.05.2010 – German Tax and Legal News

BMF issues guidance on reporting requirements on foreign investments

The BMF has published guidance on the information requirements imposed by German tax law on resident taxpayers that invest in nonresident businesses, partnerships or corporations.

28.04.2010 – German Tax and Legal News

Guidance issued on relationship between German GAAP and German tax accounting under accounting reform

The Federal Ministry of Finance has published official guidance on certain changes to the income tax rules following the German accounting reform, which may impact the recording and valuation of assets and liabilities for German tax and GAAP purposes.

28.04.2010 – German Tax and Legal News

Federal Tax Court confirms strict formal requirements for profit and loss pooling agreements

The Federal Tax Court has overruled a decision of the local tax court of Cologne relating to the contents of a profit and loss pooling agreement.

28.04.2010 – German Tax and Legal News

Federal Tax Court rules on trade tax liability of German KG with one partner for income tax purposes

The Federal Tax Court has confirmed that in a specific trust situation, a German KG with just one partner should not be subject to trade tax and rejected the tax authorities’ guidance dating back to 2005. The decision also opens up other tax planning opportunities.

28.04.2010 – German Tax and Legal News

Local tax court rules on debt restructuring

The local tax court of Munich has rejected the tax authorities’ view that (tax neutral) cash round tripping in repayment of related party loans to avoid over-indebtedness/insolvency should be reclassified as a waiver of the receivable based on the general anti-abuse rule.

28.04.2010 – German Tax and Legal News

Act implementing tax-related EU Guidelines published

The new Act for the Implementation of Tax-Related EU Guidelines and for the Amendment of Other Tax Provisions makes changes in all areas of tax law, the most important of which for corporate taxpayers is an amendment to the rules regarding the relocation of functions.

28.04.2010 – German Tax and Legal News

BMF publishes draft for an Annual Tax Act 2010

The Federal Ministry of Finance has published a draft Annual Tax Act 2010. The most important changes for corporate taxpayers relate to a relaxation of the rules regarding the transfer of the IT environment for electronic bookkeeping abroad and a further restriction of the German CFC rules.

28.04.2010 – German Tax and Legal News

Local tax court rules dividends exempt from German trade tax if treaty provides exemption

The local tax court of Düsseldorf has held that dividends may be exempt from trade tax based on a participation exemption provision in a tax treaty even if the requirements for granting the participation exemption under the German Trade Tax Act are not met.

28.04.2010 – German Tax and Legal News

Draft bill on reform of German Reorganization Act presented

The Ministry of Justice has published a draft bill for an amendment to the Reorganization Act, which would facilitate mergers and divisions of corporations.

31.03.2010 – German Tax and Legal News

Determination of active property dealing activities when sale is result of pressure from financing bank

The Federal Fiscal Court has ruled that personal or financial reasons for a sale of property are irrelevant in determining whether the property should be considered part of an active property dealing business or as passive property management. This rule should apply even where the sale is the result of economic constraints, such as pressure from the financing bank or a threat of compulsory measures.

31.03.2010 – German Tax and Legal News

Input VAT deduction on services received by foreign SPVs with Germany property could be questioned

Foreign SPVs carrying out business activities in other EC Member States (e.g. property owning companies with immovable property located in Germany) often do not have a VAT ID in their country of residence, which is a requirement as from 2010 to provide VAT-exempt services. Therefore, the service provider likely will charge VAT, which may not be creditable by the SPVs, if no VAT ID of the country of residence can be provided.

31.03.2010 – German Tax and Legal News

Finance Court of Schleswig-Holstein: Taxation of interest income from rental profits in cross-border situations

In line with several local tax court decisions, the Finance Court ruled that a deemed trading partnership will not be regarded as a business for tax treaty purposes. Therefore, interest income is taxable in the state of residence of the taxpayer even if it arises from a cash surplus as a result of property leasing activities in the other state. The decision could affect foreign investments in German real estate.

23.03.2010 – German Tax and Legal News

European Commission opens formal investigation on relief from change in ownership rule for ailing companies under state aid rules

State aid: European Commission opens in-depth investigation into the German relief clause from the change in ownership rule that preserves tax loss carryforwards of companies in a restructuring process under certain conditions ("Sanierungsklausel").

23.03.2010 – German Tax and Legal News

European Commission formally requests that Germany amend its anti-abuse provision on withholding tax relief

The European Commission has formally requested Germany to change its anti-abuse provision on withholding tax relief because of the unreasonable requirements for providing evidence of non-abusive structures.

23.03.2010 – German Tax and Legal News

Local tax court of Düsseldorf rules on income allocation of a partnership

The sale of a partnership which served as the head of a German fiscal unity during a financial year results in the need to allocate the annual results of the partnership, together with profits or losses transferred from a controlled subsidiary, to the seller and the buyer. The tax court confirmed that the allocation must be based on interim accounts as of the change in ownership, such that the result of the controlled subsidiaries is effectively apportioned between seller and buyer on a pro rata basis.

23.03.2010 – German Tax and Legal News

No permanent visa required for non-EU managing directors

Since the modernization of the German Act on Limited Liability Companies, a non-EU managing director of a German GmbH does not need a permanent entry permit.

23.03.2010 – German Tax and Legal News

New case law on cross-border loss relief within groups under EC freedom of establishment

The European Court of Justice has ruled that the Netherlands generally is not required to allow foreign subsidiaries to be included in a Dutch fiscal unity. In a similar context, the local tax court of Lower Saxony has held that the recognition of final losses of a foreign subsidiary in Germany requires a contractual obligation of the parent company to offset the losses of the subsidiary for a period of at least five years.

25.02.2010 – German Tax and Legal News

Lower Finance Court of Münster: Withholding tax obligation for payments on profit-participating loans

Withholding tax has become an important issue for foreign investors due to the strict substance requirements for exemption and relief applicable since 2007. The Lower Court of Munster has ruled on the distinction between fixed-interest bearing loans and profit-participating loans -- only the latter are subject to withholding tax under German domestic law.

24.02.2010 – German Tax and Legal News

Overview of major amendments in German civil law

This article summarizes recent major amendments in German law.

24.02.2010 – German Tax and Legal News

Cross-sales of shares may qualify as abuse

Local tax court rules that the general anti-abuse provision prevents a taxpayer from realizing a tax deductible loss in a cross-sale of shares before a law change.

24.02.2010 – German Tax and Legal News

Local tax court rules on when final PE losses become tax effective at level of head office

Contrary to the tax court of Düsseldorf, the tax court of Hamburg ruled that final PE losses should be considered in the tax year in which they were incurred (rather than in the tax year in which they became final).

24.02.2010 – German Tax and Legal News

Local tax court rules on VAT on transaction cost

A local tax court held that intermediary services for the sale of shares, which also contained elements of consultancy, should be considered a single intermediary service because the consultancy services only constituted a means to provide the financial intermediary service due.

24.02.2010 – German Tax and Legal News

Sachsen Anhalt increases RETT rate

The federal state of Sachsen Anhalt will increase its real estate transfer tax rate to 4.5% as from 1 March 2010.

24.02.2010 – German Tax and Legal News

BFH rules on tax treatment of accruals for contingent losses transferred in asset deal

Accruals for contingent losses that are transferred from the seller to the acquirer in the course of an asset deal may be shown in the tax balance sheet of the acquirer as an accrual for uncertain liabilities.

24.02.2010 – German Tax and Legal News

BMF provides additional guidance on electronic transmission of financial statements to the tax authorities

Financial statements for fiscal years starting after 31 December 2010 must be submitted electronically using the XBRL-standard.

24.02.2010 – German Tax and Legal News

Tax court case on maximum amount for tax authority fee for tax ruling

A new case before a local tax court concerns the fee charged for a tax ruling – affected taxpayers should consider appealing maximum fee assessments.

24.02.2010 – German Tax and Legal News

Law on Business Relocation still/again under discussion

The German rules on a relocation of functions are currently under review for potential amendments to the transfer package approach.

27.01.2010 – German Tax and Legal News

Documentation of extraordinary transactions

27.01.2010 – German Tax and Legal News

31 May deadline to report shareholder status after tax-neutral contributions

27.01.2010 – German Tax and Legal News

Filing deadlines for 2009 tax returns

27.01.2010 – German Tax and Legal News

BFH rules on transfer of trade tax liabilities in spin-off

27.01.2010 – German Tax and Legal News

BFH rules on discounting of shareholder loans

27.01.2010 – German Tax and Legal News

Tax court of Munich rules on tax treatment of payments to partners of a partnership

27.01.2010 – German Tax and Legal News

Local tax court rules on when final PE losses become tax effective at level of head office

27.01.2010 – German Tax and Legal News

No changes to existing PLPAs required because of changes under Accounting Reform

27.01.2010 – German Tax and Legal News

Government decides not to issue blacklist of non-cooperative jurisdictions

13.01.2010 – German Tax and Legal News

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12.01.2010 – German Tax and Legal News

Capitalization of maintenance costs

The Federal Fiscal Court held on 25 August 2009 that regular maintenance costs arising as a result of a uniform maintenance or refurbishment measure need to be included in the 15% threshold and consequently need to be capitalized as additional acquisition costs if the threshold is exceeded.

12.01.2010 – German Tax and Legal News

BMF issues decree on interpretation of Investment Tax Act

The Federal Ministry of Finance (BMF) issued a long-awaited decree on 8 August 2009 on its interpretation of the Investment Tax Act (Investmentsteuergesetz, GITA). The decree contains several new interpretations, requirements and simplifications for taxpayers falling with the scope of the GITA.

12.01.2010 – German Tax and Legal News

Lower court of Düsseldorf rules on German capital gains taxation of U.K. real estate held by German resident taxpayer

12.01.2010 – German Tax and Legal News

New group exemption for Real Estate Transfer Tax purposes

22.12.2009 – German Tax and Legal News

Upper House of Parliament passes law to accelerate economic growth

09.12.2009 – German Tax and Legal News

BFH rules on VAT treatment of security collaterals

09.12.2009 – German Tax and Legal News

Solidarity surcharge violates constitutional law according to tax court

09.12.2009 – German Tax and Legal News

Draft bill on Adoption of EU Directives and other Regulations

09.12.2009 – German Tax and Legal News

Draft bill on Law to Accelerate Economic Growth

The German Lower House approved the draft Law to Accelerate Economic Growth on 4 December 2009 with some limited amendments to the previous draft.

09.12.2009 – German Tax and Legal News

Münster tax authorities publish further guidance on tax-effective write-downs of shareholder loans

09.12.2009 – German Tax and Legal News

BFH rules on transfer of beneficial ownership when selling partnership interest under a condition precedent

09.12.2009 – German Tax and Legal News

Update on Act to Combat Tax Evasion

09.12.2009 – German Tax and Legal News

Local tax court rules on transfer of treasury stock

09.12.2009 – German Tax and Legal News

BFH refers case regarding trade tax add-back for long term interest expense to ECJ

10.11.2009 – German Tax and Legal News

Draft law proposes reliefs for business taxation

The coalition agreement signed by the new German government on 26 October 2009 contains several business tax reliefs that are intended to apply as from 1 January 2010. The short-term measures mentioned in this agreement have now been clarified in a draft law (“Proposal for a law to accelerate economic growth”).

27.10.2009 – German Tax and Legal News

New German government puts tax reform on political agenda

After the federal elections on 27 September 2009, the new German conservative/liberal coalition that will govern during the next four years published on 24 October 2009 its draft coalition agreement which is to be signed on 26 October 2009. The agreement, which describes the government’s policy goals and how it intends to achieve those goals, includes some details on planned tax changes, which are likely to affect many taxpayers.

20.10.2009 – German Tax and Legal News

Federal Tax Court confirms that transfer of leased building results in transfer of going concern, even if only part of building leased at time of transfer