RSS-Feeds German Tax and Legal News

24.04.2017 German Tax and Legal News

The legal unity of a share transfer agreement and trust agreement

The nullity of the trust agreement can lead to the ineffectiveness of the legally linked share transfer agreement.

21.04.2017 German Tax and Legal News

Reform of the German Investment Tax Act: Federal Ministry of Finance publishes 1st draft of the circular

The German Investment Tax Reform Act published in the Federal Law Gazette on July 26, 2016 raises a great number of practical questions – notwithstanding the objective to simplify the taxation of investment income which has been emphasised during the entire legislative procedure. The draft circular released by the Federal Ministry of Finance aims to clarify some of these questions.

04.04.2017 German Tax and Legal News

Federal tax court clarifies application of dual consolidated loss rules

Dual consolidated loss rules apply only in the case of a loss at the consolidated group level, not at the entity level

29.03.2017 German Tax and Legal News

BFH denies trade tax addback for intermediary companies

Intermediary company only acted on behalf of other parties

29.03.2017 German Tax and Legal News

BFH rules tax authorities’ guidance providing waiver of tax on recapitalization gains is unconstitutional

Each case must be decided on its own merits

28.03.2017 German Tax and Legal News

New: Revision of the German Corporate Governance Code – Increased demands on Compliance Management Systems

The Government Commission has decided on amendments of the DCGK that lead to higher demands on Compliance Management Systems.

21.03.2017 German Tax and Legal News

The joint operation: Alternative to a supply of temporary workers?

On April 1, 2017, the AÜG reform comes into force. From this date on, a permanent use of temporary workers will no longer be possible.

20.03.2017 German Tax and Legal News

More wage justice by law – dealing with the new draft law

What is the essence of the draft Transparent Remuneration Law and what should employers consider already now?

17.03.2017 German Tax and Legal News

Germany – Turkey: Mutual Legal Assistance in foreign bribery offences

Provision of Mutual Legal Assistance in foreign bribery offences, examined within the framework of German – Turkish relations.

16.03.2017 German Tax and Legal News

Guidance issued on the automatic exchange of information and FATCA reporting

Official guidance covers the application of the automatic exchange of information under the CRS and FATCA

16.03.2017 German Tax and Legal News

“Drop-in registered letter” of Deutsche Post AG fulfills the formal requirements of the delivery per registered letter according to § 21 GmbHG

Redemption of shares in a German GmbH: drop-in registered letter fulfills the formal requirements of a registered letter according to sec. 21 GmbHG

14.03.2017 German Tax and Legal News

Final German Administrative Principles for the Profit Attribution to Permanent Establishments published

The guidance provides the German tax authorities’ opinion on the interpretation of the “Authorized OECD Approach – AOA” as outlined in Sec. 1 para. 5 German Foreign Tax Code and the Decree Law on the Attribution on Profits to Permanent Establishments.

06.03.2017 German Tax and Legal News

Germany publishes new draft legislation on Transfer Pricing Documentation

The German Federal Ministry of Finance recently published a discussion paper on the amendment of the Decree on the type, content and extent of the transfer pricing documentation.

23.02.2017 German Tax and Legal News

BFH requests preliminary ruling from CJEU on input VAT deduction on advance payments

Issues relate to the scope and interpretation of the CJEU decision in Firin

21.02.2017 German Tax and Legal News

BFH rules on organizational integration requirement and the need for a controlling company to be regarded as a taxable person for VAT grouping purposes

VAT Group – organizational integration can exist even if the management boards of the controlling and the affiliated companies are not identical

13.02.2017 German Tax and Legal News

Aggravated Dismissal Protection with regard to Severe Disability – Participation of the Representative Body is now essential

Missing participation of Representative Body for Severely Disabled Employees before notice of dismissal is given makes dismissal invalid.

08.02.2017 German Tax and Legal News

Bill to limit tax deductibility of royalty payments undergoing legislative process

Limit would apply to royalty payments made to recipients benefiting from non-nexus-based, low-taxed IP Regime.

03.02.2017 German Tax and Legal News

At a glance: Important information as of 1 January 2017 relevant for employers

As every year, 2017 has also important changes in the area of wage tax and the social security right. There are many small changes, which should be noticed. This article lists the most important changes you need to know for your current wage tax billing.

02.02.2017 German Tax and Legal News

Tax authorities issue guidance on filing deadlines for 2016 tax returns

The German tax authorities have issued their annual guidance on the filing deadlines for the 2016 tax returns. The filing deadline for these returns is May 31, 2017. In cases where the tax returns are prepared by an external tax advisor, the filing deadline is typically extended to December 31, 2017.

02.02.2017 German Tax and Legal News

BFH rules on VAT treatment of supplies via consignment stock

Supplies via call-off-stock can be zero rated intra-community supplies if certain conditions are fulfilled.

19.01.2017 German Tax and Legal News

Federal cabinet approves draft bill to combat tax avoidance

Taxpayers would be subject to increased duties to cooperate, and financial institutions would be subject to increased disclosure requirements

11.01.2017 German Tax and Legal News

Notice of termination by reason of secret recording of a staff appraisal - Confidentiality of the spoken word as a contractual accessory obligation

The State Labor Court of Rheinland-Pfalz had to decide on the consequences arising from a secret recording of a staff appraisal by using a smartphone

10.01.2017 German Tax and Legal News

BAG: No personal talk with sick employee - No written warning for sick employee

The employer cannot insist on a personnel talk with a sick employee

05.01.2017 German Tax and Legal News

BFH rules on correction of invoices with retroactive effect

Input VAT recovery from corrected invoice is available from time original invoice is issued

20.12.2016 German Tax and Legal News

Draft law published to limit deductibility of royalty payments

Limit would apply to royalty payments made to recipients benefiting from non-nexus-based, low-taxed IP regime

19.12.2016 German Tax and Legal News

BEPS measures and additional relief from change-in-ownership rules approved

CbC and master file reporting requirements and additional relief from general change-in-ownership rule introduced

19.12.2016 German Tax and Legal News

Brexit: Possible implications on German insurance tax

Under certain conditions, the German Insurance Tax Act (VersStG) levies an insurance premium tax (IPT) of 19% on certain insurance fees. The IPT is economically paid by the insured party, but the actual payment to the tax authority is usually made by the insurance company. However, depending on the outcome of negotiations regarding the “Brexit” the obligation pay the taxes might shift from the insurance company to the insured party.

09.12.2016 German Tax and Legal News

Tax loss carryback possible after harmful share transfer during the relevant fiscal year

Lower court decision conflicts with MOF guidance

25.11.2016 German Tax and Legal News

Market price in the presence of a monopsony (demand monopoly) of the Public Authorities

Even where a monopsony (demand monopoly) of the Public Authorities is given, there is room for establishing a market price within the meaning of public price law

23.11.2016 German Tax and Legal News

Lower Finance Court rules on VAT implications of installment-based agreements

If due date is more than two years after the supply, the installment may be treated as a bad debt so that full VAT liability would arise only after payment is received

21.11.2016 German Tax and Legal News

The new records of data processing activities: What are the requirements of the EU-GDPR?

EU General Data Protection Regulation: New legal requirements for the records of data processing activities

15.11.2016 German Tax and Legal News

Inability to work during exemption from work duties after dismissal - Instruction right with respect to compensation of extra hours

Deduction of extra hours in case of an exemption from the work duties during dismissal notice period remains unaffected by later inability to work

15.11.2016 German Tax and Legal News

Avoidance of possible damage claims for expired holidays

Granting holidays prior to the end of the year is worth considering

07.11.2016 German Tax and Legal News

The membership information rights of the limited partner

The extraordinary information right of the limited partner is to be differentiated from the right to review the annual financial statement and can also serve to verify the business activities of the general partner.

31.10.2016 German Tax and Legal News

Amendments to the EU-ATAD suggested to cover hybrid mismatches with third countries

The European Commission issued a proposal for an amendment to the EU ATAD (Anti Tax Avoidance Directive). It is targeting hybrid mismatches with third countries and would require Member States to enact domestic legislation by 31 December 2018 at the latest.

19.10.2016 German Tax and Legal News

Reform of German zoning laws – Urban Area

The Urban Area – A solution for overheated housing markets?

18.10.2016 German Tax and Legal News

CJEU rules on timing of input VAT deduction on corrected invoice

Input VAT recovery from corrected invoice already available from time original invoice issued

11.10.2016 German Tax and Legal News

Lower tax court upholds constitutionality of interest rate applicable on tax payments

Lower tax court of Duesseldorf considers the interest rate of 6% per annum during 2013 to be in line with constitutional principles

27.09.2016 German Tax and Legal News

New law against corruption in healthcare - What should be taken into consideration by pharmaceutical sector and doctors in the future

The practices of hospitals/doctors, e.g. “sponsoring” or “referral bonuses” require a critical review according to the new corruption law.

23.09.2016 German Tax and Legal News

Upper house proposes anti-double deduction rule for partnership structures

Proposal to be included in BEPS implementation act

16.09.2016 German Tax and Legal News

BFH rules on RETT on share deals

BFH rules RETT should be triggered only at the time an SPA is signed, not where contractual rights are assigned in a share deal.

09.09.2016 German Tax and Legal News

Corporate structuring projects and the Brexit – Time to act now? Potential Brexit consequences you need to be aware of

The Brexit will affect cross-border restructurings relating to the UK – we show you the changes you can expect.

08.09.2016 German Tax and Legal News

Legal consequence of concealed temporary personnel leasing

A sham contract for work between lender and hirer does not necessarily lead to an invalid temporary personnel leasing.

06.09.2016 German Tax and Legal News

Duty of members of the supervisory board to keep information confidential - No attribution of knowledge to represented company

The duty of a member of the supervisory board to keep information confidential also applies vis-a-vis the company that he/she represents in the supervisory board; the knowledge cannot be attributed to the company.

06.09.2016 German Tax and Legal News

Draft law proposes additional relief from change-in-ownership rules

Continuation of same business operations would allow use of NOL carryforwards after a harmful change-in-ownership

05.09.2016 German Tax and Legal News

Land tax reform proposed

Reform would result in a fundamental restructuring of taxation of real estate

05.09.2016 German Tax and Legal News

Redemption of shares in a German GmbH and remaining shareholders’ contingent liability for compensation payments

Contingent liability of shareholders according to the BGH rulings dated 24 January 2012 and 10 May 2016 - Contingent liability of shareholders for compensation payments to exiting shareholder

05.09.2016 German Tax and Legal News

BFH confirms relationship between tax treaty provisions and tax treaty override rule in domestic tax law

Treaty override provisions apply to treaties that entered into force after the treaty override provisions were introduced

24.08.2016 German Tax and Legal News

CJEU asked to rule on whether mandatory rebates granted to private health insurances should be considered a discount for VAT purposes

The differing VAT treatment applied by the German tax authorities to mandatory rebates to private and public health insurers may not be in line with the EU Charter of Fundamental Rights

08.08.2016 German Tax and Legal News

Statutory changes to sec. 309 no. 13 German Civil Code - Impact on Forfeiture Regulations in Employment Contracts

Changes to sec. 309 no. 13 German Civil Code as of October 2016 require amendment of forfeiture regulations in employment contracts.

29.07.2016 German Tax and Legal News

Brexit: “German” Limited – unlimited? Liability risks for shareholders in a „German“ Limited

The Brexit may lead to significant liability risks for shareholders of a UK Limited in Germany.

29.07.2016 German Tax and Legal News

Court ruling on regulations applicable to cross-border relocations - Regulations of the German Reorganization Act decisive

The SE Regulation does not apply to a cross-border relocation with conversion of a French S.à r.l. into a German GmbH.

26.07.2016 German Tax and Legal News

Subscriber’s rescission in case of a failed share capital increase - Company’s obligation to facilitate a speedy execution of the increase

The subscriber of a share capital increase has a right of rescission in case the capital measure is not executed within a reasonable period.

26.07.2016 German Tax and Legal News

Extension of a contract with the managing director - The necessity of the approvals of shareholders' meetings

Approval of the contract extension with a managing director by the shareholders' meetings

11.07.2016 German Tax and Legal News

Potential impact of EU anti-tax avoidance directive on domestic German tax law

The EU ATAD is expected to have an impact on German tax law, even if Germany seems to have delivered on the blueprint for several measures

11.07.2016 German Tax and Legal News

The transfer of shares by way of anticipated inheritance leads to forfeiture of losses carried forward

The Financial Court of Muenster (FG Muenster) had to decide whether the transfer of more than 50% of the shares in a GmbH by way of anticipated inheritance leads to the forfeiture of the losses carried forward in the sense of sec. 8c of the German Corporate Tax Act (KStG). In its ruling of 4th November 2015 (9 K 3478/13 F), the Financial Court of Muenster confirmed the forfeiture of the losses carried forward in such a case.

05.07.2016 German Tax and Legal News

Denial of the notarization of the incorporation of a German GmbH by a Swiss notary - No equivalence of Swiss notarization procedures

No legally effective incorporation of a German GmbH in case of notarization by a Swiss notary

05.07.2016 German Tax and Legal News

Brexit: Majority of British Electorate Votes to Leave EU

On June 23, 2016, the majority of British voters decided to leave the EU, however this will not happen immediately. In the next few months and probably years negotiations will take place between the EU and Great Britain on their relationship after the exit. During this negotiation period, companies should keep an eye on the related fiscal and legal issues.

16.06.2016 German Tax and Legal News

Extent of Claim by the Works Council to Communication Technology

German Federal Labor Court Negates Claim to Separate Telephone Line and Internet Connection / Works Council Activity Justifies a Claim to Communication Technology, but not to a Separate Telephone Line and Internet Connection

16.06.2016 German Tax and Legal News

Private home of co-shareholder as the place of a shareholders‘ meeting

Recent decision of the German Federal Supreme Court - German Federal Supreme Court decides on validity of shareholders’ resolutions adopted in private home of co-shareholder

13.06.2016 German Tax and Legal News

German Act on Power Market 2.0: European Commission approves German plan to phase-out certain lignite-fired power plants according to EU state aid rules

On May 27, 2016 the European Commission (EU COM) has decided upon the state aid implications of the German legislator’s plan to phase-out certain lignite-fired power plants by compensating the plant operators for putting the plants into a security reserve for a period of four years. The compensation worth € 1.6 in total does not violate EU state aid rules.

09.06.2016 German Tax and Legal News

Draft tax law includes BEPS measures incl. country-by-country reporting requirements

Germany to introduce CbC reporting requirements and obligation to prepare master file

09.06.2016 German Tax and Legal News

No retroactive taxation of upstream merger involving tainted shares

An upstream merger does not fulfill all of the criteria of a disposal due to lack of consideration from the perspective of the transferring entity

02.06.2016 German Tax and Legal News

Preclusion of the corporate regulatory fine after a voluntary disclosure

Voluntary disclosure protecting corporate bodies against criminal prosecution and enterprises against regulatory fines.

30.05.2016 German Tax and Legal News

German Federal Court of Justice: Liability of a Director of UK-Limited for payments resulting in a reduction of insolvency assets pursuant to German law

The director of a UK Limited can also be liable for payments made after insolvency pursuant to Sec. 64 German Limited Liability Companies Act.

30.05.2016 German Tax and Legal News

MOF decree emphasizes importance of tax compliance management system

The existence of a Tax CMS can affect whether a taxpayer can be charged for willful or grossly negligent failure to comply

27.05.2016 German Tax and Legal News

Shift to full-time work does not increase the acquired leave entitlement

Wechsel von einer Teilzeittätigkeit zu einer Vollzeittätigkeit erhöht nicht den während der Teilzeittätigkeit erworbenen Urlaubsanspruch

25.05.2016 German Tax and Legal News

European Commission refers Germany to CJEU regarding implementation of TOMS rules

German tour operator margin scheme not in line with EU VAT law?

18.05.2016 German Tax and Legal News

Germany’s Federal Fiscal Court rules its first case regarding Guaranteed Payments

The application of subject-to-tax clauses was not decisive but the allocation of taxation rights under article 14 of the former Double Tax Treaty between the US and Germany based upon individual partner’s services performance

10.05.2016 German Tax and Legal News

Risk of liability: Account warranties in German M&A deals - German Court decides on warranty claims

Sellers‘ liability under accounts warranty in German M&A deals may be extensive and include unknown liabilities

10.05.2016 German Tax and Legal News

Evidence of power of representation of the director of a UK PLC - Mere inspection of Companies House is not sufficient

Comprehensive certificate of a UK notary as proof of authority of a director of a UK PLC towards German commercial register

27.04.2016 German Tax and Legal News

Proposal for a Directive on European single-member companies

Improvement of opportunities for cross-border activities of companies

26.04.2016 German Tax and Legal News

BFH rules on VAT treatment of transfers of co-ownership shares in goods

Transfer of co-ownership shares in goods may be considered a supply of goods potentially qualifying for the VAT exemption for intra-community supplies

20.04.2016 German Tax and Legal News

Tax auditors instructed not to apply recent BFH decisions on impaired intercompany loans in similar circumstances

The Ministry of Finance has published a notice instructing tax auditors not to apply recent decisions, in which the BFH held that article 9 of the OECD model tax treaty overrides the interpretation of the arm’s length principle under German domestic tax law.

12.04.2016 German Tax and Legal News

Dismissal due to Excessive Private Use of Internet

Evaluation of Browser History without Consent of Employee

11.04.2016 German Tax and Legal News

Federal Constitutional Court rejects complaint against trade tax addback

The court’s decision was based on procedural grounds.

30.03.2016 German Tax and Legal News

New guidance published on VAT treatment of supplies via consignment stock

OFD Frankfurt updates guidance following tax court decisions

30.03.2016 German Tax and Legal News

CJEU rules on VAT treatment of payments for unused airline tickets

VAT is due on airline tickets even where the passenger does not use the ticket

30.03.2016 German Tax and Legal News

BFH rules on input VAT recovery by management holding companies and on partnerships in a VAT group

An active holding company generally can recover input VAT and partnerships may be a controlled company in a VAT group

30.03.2016 German Tax and Legal News

Lower Finance Court of Cologne rules on conditions for obtaining a VAT refund under the special refund procedure for EU residents

Submission of scanned invoice copies is sufficient for input VAT refund under the special refund procedure for EU residents

30.03.2016 German Tax and Legal News

BMF issues guidance on input VAT refund claims of nonresident businesses

BMF clarifies conditions for input VAT refund from invoices for intra-community supplies or export supplies

17.03.2016 German Tax and Legal News

State of Thuringia to increase RETT rate

RETT rate will increase from 5% to 6.5% on 1 January 2017

17.03.2016 German Tax and Legal News

Tax authorities issue guidance on filing deadlines for 2015 tax returns

The German tax authorities have issued their annual guidance on the filing deadlines for the 2015 tax returns. The filing deadline for these returns is May 31, 2016. In cases where the tax returns are prepared by an external tax advisor, the filing deadline is typically extended to December 31, 2016.

11.03.2016 German Tax and Legal News

Federal Constitutional Court agenda for 2016

The Federal Constitutional Court recently published the issues that it will address during 2016

02.03.2016 German Tax and Legal News

EGC rules exception to change-in-ownership rule qualifies as unlawful state aid

The EU General Court has confirmed the decision of the European Commission that the Sanierungsklausel constitutes State aid

29.02.2016 German Tax and Legal News

BFH asks Federal Ministry of Finance to opine on whether RETT intragroup exemption constitutes state aid

RETT intragroup restructuring clause could constitute unlawful state aid under EU principles

23.02.2016 German Tax and Legal News

Partnership can be controlled party in a VAT group. German VAT group in line with the EU provisions? Nontaxable persons cannot be the controlling entity of a VAT group

The Federal Tax Court has ruled that partnerships may be a controlled company in a VAT group in certain cases. Nontaxable persons may not participate in such a group as controlling entity.

23.02.2016 German Tax and Legal News

CJEU AG opines invoice corrections may have retroactive effect for input VAT deduction

AG questions German provisions deferring deduction of input VAT in case of invoice corrections.

19.02.2016 German Tax and Legal News

Constitutional court rules treaty override provision in line with the constitution

Legislature can introduce treaty override provisions that secure German taxation rights

16.02.2016 German Tax and Legal News

BFH refers constitutionality of interest deduction limitation rule to constitutional court

Decision of the constitutional court may take years

16.02.2016 German Tax and Legal News

Tax Amendment Act 2015

The amendments apply as from 6 November 2015.

12.02.2016 German Tax and Legal News

MOF plans stricter monitoring of energy and electricity consumption

The MOF has published a draft of new transparency rules for the energy and electricity tax, as well as changes to the energy and electricity tax ordinance.

27.01.2016 German Tax and Legal News

At a glance: Important information as of 1 January 2016 relevant for employers

This year we miss the highlight of changes in the area of the wage tax and the social security right. A huge number of smaller changes should be noted. In this article, you will find the most important changes you need to know for the current wage tax billing.

22.01.2016 German Tax and Legal News

BMF issues guidance on triangular leasing relationships

Determination of the parties of a supply of assets for leasing purposes depends on the contractual agreements

22.01.2016 German Tax and Legal News

BMF clarifies VAT treatment of split transports

Split transport transactions can be treated as direct supplies to the final destination provided that the customer is already identified at the commencement of the shipment

22.01.2016 German Tax and Legal News

AG questions German standard allocation key of pro rata input VAT deduction for mixed use buildings

Standard use of other than turnover based allocation key not in line with EU VAT Directive

18.01.2016 German Tax and Legal News

New tax treaty with Netherlands applies as from 1 January 2016

New real estate clause will affect inbound investors

06.01.2016 German Tax and Legal News

Local tax court clarifies requirement for early termination of tax group

Intragroup restructuring may constitute an important reason for terminating tax consolidation before the end of the minimum five-year period

14.12.2015 German Tax and Legal News

Local tax court confirms conditions for RETT intragroup restructuring exception

Five-year pre-restructuring period not required for newly set up companies

01.12.2015 German Tax and Legal News

Minimum shareholding for participation exemption for capital gains from the sale of shares unlikely to be introduced

New draft of investment tax act likely not include a minimum shareholding requirement

27.11.2015 German Tax and Legal News

BFH rules on requirements for company addresses on invoices

The BFH´s ruling on requirements for addresses on invoices now prohibits the mere use of a P.O. box.

27.11.2015 German Tax and Legal News

BFH rules on place of supply for low value consignments

The place of supply for VAT purposes might be in Germany in the case of imports of small consignments, even if the supplier acts on behalf of the final customer

27.11.2015 German Tax and Legal News

Lower tax court of Munich rules on VAT invoice requirements for triangular supplies

The court has ruled that the German invoicing regulations in case of triangular supplies exceed the requirements in the EU VAT directive

26.11.2015 German Tax and Legal News

CJEU rules on VAT treatment of bitcoins

The exchange of traditional currency for units of bitcoin, and vice-versa, is exempt from VAT

22.10.2015 German Tax and Legal News

CJEU rules on VAT exemption for provisioning of seagoing vessels via intermediaries

The CJEU has ruled that the VAT exemption for the supply of fuel to seagoing vessels may be applied to intermediaries for supplies made before the last stage of the supply chain.

22.10.2015 German Tax and Legal News

BMF issues new guidance on conditions for refund of incorrectly charged VAT

BMF clarifies that refund of incorrectly charged VAT by the tax authorities requires the repayment of the amount to the recipient

25.09.2015 German Tax and Legal News

Discussion draft on amendments to domestic participation exemption for portfolio investments

A proposal has been issued that would abolish the participation exemption for German corporate shareholders’ capital gains from portfolio shareholdings.

18.09.2015 German Tax and Legal News

CJEU confirms 10-year deferral rule for German exit taxes under old administrative guidance

In the Verder LabTec case (C-657/13), the CJEU confirmed that German exit tax rules granting a 10 year deferral are principally in line with EU law

15.09.2015 German Tax and Legal News

Lower tax court clarifies change-in-ownership rules

Lower tax court rejects tax authorities’ interpretation of the definition of parties acting in concert in the change-in-ownership rules

15.09.2015 German Tax and Legal News

Lower tax court denies full participation exemption for dividends under tax treaty

Lower tax court confirms the tax authorities approach of only granting a 95% participation exemption for dividends under a DTT

31.08.2015 German Tax and Legal News

MOF clarifies Organschaft rules for atypical silent partnerships

A new circular clarifies and confirms the MOF position on the treatment of atypical silent partnerships under the tax consolidation rules

25.08.2015 German Tax and Legal News

Intrastat reporting threshold for arrivals to be raised to EUR 800,000

As from January 1, 2016, the Intrastat reporting threshold for arrivals will be increased from EUR 500,000 to EUR 800,000; the threshold for dispatches will remain unchanged.

25.08.2015 German Tax and Legal News

BMF issues guidance on VAT treatment of security held in the construction industry

The guidance limited application to situations where full payment is received significantly later than the date of the supply to security held within the construction industry

07.08.2015 German Tax and Legal News

RETT burden to increase

The Federal Constitutional Court has issued a decision that will have significant impact on RETT taxation.

22.07.2015 German Tax and Legal News

CJEU rules on VAT deduction of a holding company

Input VAT incurred by a holding company on the acquisition of shareholdings in subsidiaries should be fully recoverable provided the holding actively manages the subsidiaries and makes no exempt supplies.

22.07.2015 German Tax and Legal News

BFH rules on VAT treatment of a transfer of a going concern to a group of purchasers

No transfer of a going concern occurs where a business is transferred as a whole to a group of purchasers if each separate transaction involved in the transfer does not fulfill the criteria for of a transfer of a going concern.

22.07.2015 German Tax and Legal News

Lower tax court rules on VAT treatment of mandatory rebates granted to private health insurances which should not be considered as a discount for VAT purposes

Mandatory rebates issued by pharmaceutical manufacturers to public health insurances should not be considered as discounts for VAT purposes if granted to private health insurances.

20.07.2015 German Tax and Legal News

Federal state Brandenburg increases real estate transfer tax rate

RETT rate increased from 5% to 6.5%

16.07.2015 German Tax and Legal News

BFH introduces new doctrine on subordination agreements

The BFH has confirmed its opinion regarding the required wording of subordination agreement and introduced a new doctrine regarding the consequences for failure to include the required wording.

13.07.2015 German Tax and Legal News

Is There a Need for a Special Law on General Terms and Conditions for Companies?

The German law on general terms and conditions is very strict – even in b2b relations. Is that up-to-date?

13.07.2015 German Tax and Legal News

Reform of Insolvency Law – Greater Legal Certainty for Suppliers of Business Partners in Insolvency

The reform of the insolvency law focusses on changes regarding the avoidance law – a more supplier-friendly law might come.

13.07.2015 German Tax and Legal News

German Government Draft Bill to Amend the Stock Corporation Act

A new try – the German Government presents a draft bill to amend the AktG. We inform you about the main topics of the draft bill.

13.07.2015 German Tax and Legal News

A Revolution in Employee Participation in the Supervisory Board?

The Regional Court of Frankfurt/Main has taken a very progressive decision on the decisive shareholders for the applicability of a German co-determination which could lead to a complete new situation for most of the German groups of companies.

13.07.2015 German Tax and Legal News

German Federal Court of Justice: Post Contractual Customer Protection Clauses for Shareholders of Limited Liability Companies exceeding a period of two years are void

The BGH recently made an important ruling on the term for customer protection clauses.

13.07.2015 German Tax and Legal News

Determining Social Criteria for Dismissals for Operational Reasons with an Option of Altered Conditions of Employment

In case of termination of an employment relationship in Germany within the applicability of the German Unfair Dismissal Act, the social criterias are to be considered carefully.

13.07.2015 German Tax and Legal News

Consequences for Business Practice from the Middelhoff Decision by the Regional Court in Essen

The spectacular case against the former chairman of the board of directors of Arcandor Group again shows the monetary and penal consequences a legal representative might face.

13.07.2015 German Tax and Legal News

Legal requirements for qualified subordination agreements

In its decision dated 5 March 2015 (case IX ZR 133/144) the German Federal High Curt (Bundesgerichtshof - BGH) ruled on the legal nature of qualified subordination agreements as well as to the legal requirements. The ruling, referring to a highly disputed restructuring instrument, will have significant consequences for the practice.

13.07.2015 German Tax and Legal News

European Court of Justice: Liability for Administrative Offenses and Fines by the Company Being Acquired in the Event of Mergers by Acquisition

The ECJ made an important ruling which also affects the interpretation of national provisions concerning mergers and leads to a higher risk of the absorbing entity.

03.07.2015 German Tax and Legal News

Local court rules on five-year minimum term of PLTA in retroactive spinoff

The local tax court of Düsseldorf has ruled that the five- year minimum term of a PLTA is not met if the subsidiary was not in existence for the entire period. The retroactive effect of reorganization is disregarded in determining the term of a PLTA.

23.06.2015 German Tax and Legal News

Guidance issued on VAT place of supply rules applicable to conferences

The BMF has clarified that the place of supply rules applicable to trade fairs and exhibitions also apply to conferences.

23.06.2015 German Tax and Legal News

Import VAT deduction denied where warehouse keeper lacked authority to dispose of stored imported goods

The tax court stated that the authority to dispose of the goods is a mandatory condition to be entitled to deduct import VAT.

23.06.2015 German Tax and Legal News

VAT “rounding rule” referred to CJEU

The Tax Court of Muenster has asked the CJEU to verify the applicable rounding provisions on the German pro rata rate.

22.06.2015 German Tax and Legal News

Lower tax court denies deemed dividend treatment on related party loan

The lower tax court of Baden Wuerttemberg has denied deemed dividend treatment as a result of a write-off of a loan receivable in a related party situation.

27.05.2015 German Tax and Legal News

Limits on use of non-EU company cars of cross-border commuters within the EU

As from May 2015, non-EU-registered company cars no longer may be used by cross-border commuters for private purposes in the EU without customs clearance.

27.05.2015 German Tax and Legal News

Principle of VAT neutrality prevails over domestic rules

The CJEU has ruled that VAT neutrality is a basic principle of EU VAT harmonization and this principle cannot be restricted by the domestic law of the EU member states.

27.05.2015 German Tax and Legal News

13th directive VAT refund claim rejected because of delayed submission of invoices

A non-EU established company must submit original invoices to the German tax authorities within a specified period for to obtain a refund of input VAT.

21.05.2015 German Tax and Legal News

Federal Constitutional Court agenda for 2015

The Federal Constitutional Court recently published the issues that it will address during 2015

19.05.2015 German Tax and Legal News

BFH rules CFC income is exempt from trade tax

The BFH has ended a long-standing controversy by ruling that passive income of a wholly-owned low-taxed foreign subsidiary that is covered by German CFC rules is not subject to trade tax because it is deemed income of a foreign PE.

19.05.2015 German Tax and Legal News

Germany: Accrual-based tax accounting obligatory for partnerships

Germany’s Federal Tax Court (BFH) issued a decision on December 10, 2014 on the obligation of foreign entities - specifically partnerships - to determine income on an accruals basis.

19.05.2015 German Tax and Legal News

Shortening of shareholder chain does not trigger change-in-ownership rules

The local tax court of Düsseldorf has ruled that the change-in-ownership rules that result in a forfeiture of tax losses are not triggered where mergers of entities within the shareholder chain merely result in a shortening of the chain.

18.05.2015 German Tax and Legal News

Upper House of Parliament recommends rule requiring 5% add back of non-resident dividends for trade tax purposes in tax group situation

The upper house of parliament has launched an initiative to reverse a taxpayer favorable decision of the BFH on the trade tax treatment of non-resident dividends.

28.04.2015 German Tax and Legal News

BFH rules on VAT treatment of chain supplies

BFH deviates from position of the tax authorities

28.04.2015 German Tax and Legal News

AG supports VAT recovery for active holding companies

Right to reclaim VAT should be allowed where a holding company manages its subsidiaries.

28.04.2015 German Tax and Legal News

Time Limit for Security after Termination of a Domination and Profit and Loss Transfer Agreement

With regard to claims which were created before the publication of the termination of the domination and profit and loss transfer with the commercial register and which become due only thereafter, the claims of creditors for security by the dominant company for receivables against the dependent company are limited to those which become due within five years after publication of the termination of the corporate agreement.

28.04.2015 German Tax and Legal News

Liability of a Managing Director of a Limited Liability Company for Infringing Internal Regulations of Responsibility

The article summarizes a recent decision (OLG Naumburg, judgment of 01.23.2014 - 2 U 57/13) on the Liability of a Managing Director and concludes with practical instructions for the CEO.

28.04.2015 German Tax and Legal News

Minimum Wage For On-Call Services and On-Site Stand-By Times

On November 19, 2014, the Federal Labour Court decided (5 AZR 1101/12) that the minimum wage in the care sector is to be paid not only for full-time employment, but also for On-Call Services and On-Site Stand-By Times.

28.04.2015 German Tax and Legal News

Gender Equality in German Management through Mandatory Quorum?

Compared to many other European nations, the gender equality in management positions in German companies is not the status quo, even after years of non-binding agreements on economic and political objectives. However, this condition will now be solved by new applicable law.

28.04.2015 German Tax and Legal News

German Venture Capital Bill

As the number of start-up companies is decreasing in Germany and the government has not yet taken action regarding the introduction of a venture capital law, the Federation of German Venture Capital Companies has proposed a bill for a venture capital law. The proposed measures are taking the interest of all involved parties equally into consideration and could make Germany more attractive as a location for investment and innovation on an international level.

28.04.2015 German Tax and Legal News

Liability Under Anti-Trust Law for Financial Investors and Private Equity Companies

A large number of financial investors are still unaware of the fact that even purely financial interests run the risk of liability under anti-trust law. If the portfolio company acts contrary to anti-trust law and such action is carried out and not stopped because it is not discovered, the parent private equity company also risks incurring a fine.

27.03.2015 German Tax and Legal News

Tax court rules on tax treatment of cancellation of debt income related to real estate investment loan

The local tax court of Berlin-Brandenburg has ruled that cancellation-of-debt income relating to a nonresident corporation’s real estate investment loan is not subject to German income tax.

25.03.2015 German Tax and Legal News

BFH rules on attribution of domestic real estate under RETT

The BFH has ruled that where a legal entity acquires domestic real estate under a condition precedent, it does not “own” the property within the meaning of the RETT Act.

25.03.2015 German Tax and Legal News

Local Tax Court rules on RETT intragroup restructuring exemption in upstream merger

The Local Tax Court of Nürnberg has ruled that the RETT intragroup restructuring exemption applies where an entity owning real estate is merged upstream into its 100% parent company. The decision is contrary to the tax authorities’ guidance on the RETT intragroup restructuring exemption.

24.03.2015 German Tax and Legal News

Administrative guidance issued on VAT treatment of discounts granted by agents

The German Ministry of Finance issued a circular dated 27 February 2015 confirming the jurisdiction of the ECJ and the German Federal Tax Court (BFH) in the case “Ibero Tours” on the VAT treatment of discounts granted by agents.

24.03.2015 German Tax and Legal News

Local court rules on VAT treatment of a transfer of a going concern to a group of purchasers

The transfer of a business to a group of purchasers can qualify as transfer of a going concern if the purchasers continue the activity of the business after the transfer.

24.03.2015 German Tax and Legal News

Requirements for the VAT treatment as a zero rated intra-community supply

BFH rules on the requirements for a zero-rated intra-community supply

24.03.2015 German Tax and Legal News

BFH confirms favorable trade tax treatment of dividends under tax group rules

The BFH has upheld a taxpayer-favorable decision by a lower court on the trade tax treatment of dividends distributed by a nonresident subsidiary to its German parent company that is a controlled company in a German tax group.

23.03.2015 German Tax and Legal News

Germany’s taxing rights based on section 1(1) FTC can be restricted under associated enterprises article in tax treaty

The BFH has confirmed that Germany’s tax treaties can limit Germany’s taxation rights if a treaty contains a provision equivalent to the associated enterprises article in the OECD model treaty and if the prices paid between the entities involved are on arm’s length terms.

18.03.2015 German Tax and Legal News

CJEU gives EU member states latitude to significantly restrict cross-border loss relief

The CJEU rejected the European Commission’s claim that the UK legislation on cross-border group relief is incompatible with the freedom of establishment because the rules make it virtually impossible in practice and concluded that the UK rules, as introduced in 2006, are compatible with EU law.

17.03.2015 German Tax and Legal News

Local Tax Court rules on RETT intragroup restructuring exemption

The Local Tax Court of München has ruled that the RETT intragroup restructuring exemption does not apply where the mandatory five-year pre-reorganization holding period is not satisfied because the relevant subsidiary was acquired from a third party less than five years ago.

09.03.2015 German Tax and Legal News

Munich court rules on taxation of pilots flying in national and international air traffic

The tax court of Munich had to decide whether a pilot’s foreign income can be exempt under progression or if a tax credit for taxes paid in Austria should be granted for German tax purposes.

04.03.2015 German Tax and Legal News

BFH confirms tax deductibility of RETT

The BFH has confirmed that real estate transfer tax (RETT), triggered upon the acquisition of at least 95% of the interest in a real estate-owning partnership, is an immediately deductible business expense for income tax purposes.

04.03.2015 German Tax and Legal News

BFH rules on incongruent dividend distributions

The BFH has held that an incongruent dividend distribution of a corporation in the course of a partial change in shareholders does not represent an abuse of law.

03.03.2015 German Tax and Legal News

MOF releases draft bill with postponed measures from 2015 tax bill

The MOF has released a draft bill that includes certain measures that were not approved as part of the 2015 budget.

24.02.2015 German Tax and Legal News

BFH rules on procedure for input VAT refund for non-residents

Non-resident businesses are allowed to apply for input VAT refund within regular VAT returns when issuing invoices where German VAT is incorrectly charged

24.02.2015 German Tax and Legal News

BFH rules on VAT impact of discount granted by foreign company

No input VAT correction required at the level of the last recipient in case of cross-border rebates earlier in the supply chain.

24.02.2015 German Tax and Legal News

BFH rules on business activities that could trigger trade tax for professional services partnerships

The BFH has provided guidance on the extent of business activities that could trigger trade tax for professional services partnerships

17.02.2015 German Tax and Legal News

Federal Court of Justice rules that company general meeting can be held abroad

The Federal Court of Justice has ruled that a general meeting of a European public company can take place in Germany or abroad.

10.02.2015 German Tax and Legal News

Dividends from French subsidiaries not subject to addback of 5% deemed nondeductible business expenses

The Berlin tax authorities have issued a decree confirming that dividends paid by a French subsidiary to a German parent are 100% tax exempt and that the addback of 5% deemed nondeductible business expenses does not apply.

09.02.2015 German Tax and Legal News

Federal Tax Court rules on extension of tax audit period

The Federal Tax Court has confirmed that the tax authorities may extend the period of a tax audit if significant additional taxes can be expected for other periods.

28.01.2015 German Tax and Legal News

Requirements for tax-free repayment of capital by foreign subsidiary tightened

The federal tax authorities have published their opinion regarding the tightened conditions for a tax-free repayment of capital by a foreign subsidiary to a German shareholder. According to the tax authorities, a separate application is required not only for the repayment of share premium, but also for a repayment of stated share capital in order to qualify as tax-free repayment of capital.

27.01.2015 German Tax and Legal News

The German Minimum Wage Law – Summary and Practical Consequences

§ 20 of the German Law to Regulate a General Minimum Wage (MiLoG) includes the fundamental duty for employers registered nationally or abroad, which duty is punishable with a fine, to pay their national employees at least the minimum wage from January 1, 2015. The gross amount of the minimum wage is initially set at EURO 8.50 per hour. The payment must be made by the due date stated in the MiLoG at the latest.

27.01.2015 German Tax and Legal News

Tit for Tat EU and Russian Sanctions – Consequences for German Exports

More and more voices are saying that the sanctions imposed between the European Union (EU) and Russia are not yielding the desired results nor are they economically sensible. Political relief and the lifting of sanctions are not yet in sight, however. The following article gives a short summary of the measures imposed by the EU and the Russian Federation as well as the legal consequences and also suggests recommended action.

27.01.2015 German Tax and Legal News

Attempts to Reform Manager Liability

There is often the impression among the wider public that the liability of board members or managing directors is too lax in Germany. But contrary to public opinion manager liability in Germany is actually very strict. This article assesses the current liability scheme and outlines reform considerations.

27.01.2015 German Tax and Legal News

Post-Contractual Non-Competition Clause for the Managing Director of a Limited Liability Company – Effect of Termination for Good Cause

Is a managing director of a German GmbH still bound by his post-contractual non-compete obligation if he terminates his service agreement for good cause? This article provides answers by touching on a recent court ruling by the Higher Regional Court of Celle (Ruling Dated September 24, 2013 – Case No.: 9 U 121 / 12).

23.01.2015 German Tax and Legal News

Threshold for application of reverse charge on metals established and scope of application limited

The reverse charge rules applying to supplies of metals have been revised.

22.01.2015 German Tax and Legal News

At a glance: Facts and figures on income tax, social security and the new minimum wage 2015 – Important information as of 1 January relevant for employers.

2015 there is a huge number of changes in the area of the wage tax and the social security right. The highlight this year is the new German minimum wage and the impact on wage tax and social security. In this article you will find the most important changes you need to know for the current wage tax billing.

13.01.2015 German Tax and Legal News

New guidance issued on electronic archiving of accounting and tax information and electronic data access by the tax authorities

The Federal Ministry of Finance has issued new rules for the electronic archiving of accounting and tax data, and principles regarding electronic tax audits.

12.01.2015 German Tax and Legal News

Changes to treaty override provision may affect taxation of foreign persons with interests in German partnerships

Recent changes to the tax treaty override rules could trigger potential taxation of reorganizations and other transactions involving German partnerships with foreign individual or corporate partners.

12.01.2015 German Tax and Legal News

New treaty with the Netherlands likely to apply as from 2016

The existing treaty will be replaced by a new treaty.

09.01.2015 German Tax and Legal News

BFH rules on gift tax consequences of share capital increases

The Federal Tax Court has held that an increase of a corporation’s share capital is subject to gift tax if the premium to be paid by the new shareholder does not reflect the fair market value of the newly issued shares.

09.01.2015 German Tax and Legal News

Tax authorities issue guidance on filing deadlines for 2014 tax returns

The German tax authorities have issued their annual guidance on the filing deadlines for the 2014 tax returns. The filing deadline for these returns is May 31, 2015. In cases where the tax returns are prepared by an external tax advisor, the filing deadline is typically extended to December 31, 2015.

22.12.2014 German Tax and Legal News

Anti-hybrid and anti-double-dip rules not to be implemented in 2014

The upper house of parliament has given its final vote on a law proposed by the federal government and adopted by the lower house of parliament. The final version of the bill does not include the original proposed anti-hybrid and anti-double-dip rules or the introduction of a 10% minimum shareholding to qualify for the participation exemption on gains from the sale of shares.

19.12.2014 German Tax and Legal News

BFH rules on income adjustments under CFC rules

Germany’s Federal Tax Court (BFH) has ruled that a non-interest-bearing loan granted by a German taxpayer to a foreign subsidiary does not trigger an income adjustment under Germany’s CFC rules to the extent the loan is regarded as a loan similar to equity. The court also determined that the particular provision (Section 1 CFC Act) in German law generally is not incompatible with EU law.

19.12.2014 German Tax and Legal News

MOF issues opinion on constitutionality of interest deduction limitation rule

Following the Federal Tax Court’s (BFH) 2013 decision in which it expressed doubts as to whether the interest deduction limitation rule is in line with the German constitution, the Ministry of Finance (MOF) has issued guidance confirming its own position that the rules are in conformity with the constitution. The MOF guidance also states that the BFH’s conclusion that the taxpayer must be granted a suspension of the execution of an assessment will not be applied to similar cases.

17.12.2014 German Tax and Legal News

Transition period extended for application of VAT reverse charge to supplies of metals

The Ministry of Finance (BMF) has extended the non-objection period for the application of the VAT reverse-charge mechanism on supplies of certain metals.

17.12.2014 German Tax and Legal News

VAT treatment of payments for unused flight tickets

CJEU to rule on VAT treatment of payments for unused flight tickets.

17.12.2014 German Tax and Legal News

CJEU rules on VAT fixed establishments

The CJEU has ruled on the creation of a VAT fixed establishment without using own human and technical resources.

17.12.2014 German Tax and Legal News

European Commission proceeds against Germany’s personal signature requirement for non-EU resident businesses on input VAT refund applications

European Commission refers Germany to the Court of Justice of the European Union on the personal signature requirement for non-EU resident businesses on input VAT refund applications.

08.12.2014 German Tax and Legal News

Federal states North Rhine-Westfalia and Saarland will increase real estate transfer tax rate

The federal state of North Rhine-Westfalia announced to increase the real estate transfer tax rate from 5% to 6.5% and the federal state of Saarland announced to increase the real estate transfer tax rate from 5.5% to 6.5% on January 1, 2015.

03.12.2014 German Tax and Legal News

BFH rules on interest on additional tax resulting from cross-border transfer pricing adjustments

Germany’s Federal Tax Court (BFH) has confirmed that a taxpayer is required to pay interest on additional taxes resulting from a cross-border transfer pricing adjustment even if the adjustment does not trigger a corresponding interest refund in the other country.

01.12.2014 German Tax and Legal News

Anti-hybrid and anti-double-dip rules unlikely to be implemented

The federal government has announced that it does not intend to support the proposed introduction of an anti-hybrid rule and an anti-double-dip rule or the introduction of a 10% minimum shareholding to qualify for the participation exemption on gains from the sale of shares.

26.11.2014 German Tax and Legal News

Local tax authorities broaden concept of “harmful divesture” following tax-neutral spinoff

The Ministry of Finance (MOF) of the State of Brandenburg has issued its interpretation on when a divesture of shares following a tax-neutral spinoff results in retroactive taxation of the spinoff. The MOF’s announcement considerably broadens the interpretation of a “harmful divesture” compared to guidance previously issued by the Federal MOF.

25.11.2014 German Tax and Legal News

Unanimous Shareholders Resolution Required for Company Documents to be Provided to Competitors for Due Diligence Investigations

The Higher Regional Court in Cologne has decided that a unanimous shareholders’ resolution is required before company documents can be provided to competitors for a due diligence investigation

25.11.2014 German Tax and Legal News

Is the "Apple Store" a 3D Trademark?

With a recent ruling, the ECJ decided that an Apple flagship store can be protected as a 3D trademark. This ruling is important for many retail companies considering an additional protection of their design and corporate identity.

25.11.2014 German Tax and Legal News

Downsizing the Board of Management in a German AG pursuant to the Articles of Association does not constitute Good Cause for the Revocation of a Board Member

The Regional Court Frankfurt am Main decided in its ruling dated April 22, 2014 that downsizing the board of management of the Commerzbank Aktiengesellschaft (AG) as resolved by the supervisory board pursuant to the articles of association, does not constitute a good cause for the revocation of one of its board members. Nor would good cause exist if the board of management was to be downsized in the course of extensive cutbacks in staff.

25.11.2014 German Tax and Legal News

Interpreting a Contractual Penalty Clause Under Employment Law

A contractual penalty regulated under employment law does not cover a refusal to work which is contrary to the employment agreement if the agreement is "terminated" by the employee without observing the notice period as the Federal Labor Court has now ruled (BAG judgement dated 23 January 2014; Case No.: 8 AZR 130/13).

21.11.2014 German Tax and Legal News

New regulations of the possibility of voluntary disclosure of tax offences.

The legislative regulations of the possibility of voluntary disclosure of tax offences according to the German fiscal code have been changed recently and will be in force from January 1, 2015.

19.11.2014 German Tax and Legal News

Local Tax Court rules on obligation to provide due diligence report to tax auditor

The Local Tax Court of Muenster has issued a decision in which it expresses doubts about a taxpayer’s obligation to provide a due diligence report to the tax authorities for review in a general tax field audit.

06.11.2014 German Tax and Legal News

Application for constitutional review of German Air passenger duty

German Federal Constitutional Court denies violation of German Constitutional Law.

06.11.2014 German Tax and Legal News

Guidance issued on application of reverse charge for supplies of certain metals

The Ministry of Finance has issued guidance on the newly introduced reverse-charge mechanism for supplies of precious metals, metal, selenium and cermets

 
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