The cabinet has adopted a bill to regulate the automatic exchange of bank account and investment income information with the 60 co-signatory states of the “multilateral competent authority agreement on automatic exchange of financial account information”.
Tax & Legal
The Constitutional Court has held the set calculation of the value of the land held by a company when assessing the transfer of the company’s shares to real estate transfer tax to be unconstitutional. The government has been given until June 30, 2016 to enact a different formula, to be applied retroactively to January 1, 2009.
The ECJ has held that German provisions excluding partnerships from VAT groups altogether and only admitting closely held subsidiaries are in conflict with the Sixth Directive and can only be justified by a specific need to prevent abuse.
The Supreme Tax Court has followed its previous case law in holding that a company financed by subordinated shareholder loans may not take up a liability until the conditions for repayment are met. However, the subordination is a shareholder’s capital contribution to be taken to capital reserve rather than income to the extent the debt had value as an asset at the time.
The finance ministry has decreed that architects, engineers and construction contractors shall realise their profits in accordance with the agreed progress payments reflecting the degree of contract completion.
The finance ministry has drafted a decree setting forth the administrative and other regulations to be followed by banks in fulfilment of their US FATCA obligations.
The ECJ has held that a non-resident employee need not be granted the privileges of a resident in the year he moves to take up employment in another country.
The Supreme Tax Court has held that the pre-2008 disallowance of loan interest on related-party finance for the purchase of shares refers to direct investments only.
The Supreme Tax Court has held that a lawyer did not earn taxable income through misappropriation of funds held on behalf of clients.
An ECJ advocate general has suggested the court hold that the 5% effectively connected expense add-back for foreign dividends infringes a company’s freedom of establishment if an otherwise comparable domestic company could avoid the add-back by joining a tax group.