An ECJ advocate general has suggested the court rule that a German practice of allowing deferral of taxation on the hidden reserves (appreciation in value) in intangible assets transferred abroad is proportional and reasonable in the light of the overall need to ensure a fair distribution of taxing rights between member states.
Tax & Legal
The finance ministry has issued a decree instructing tax offices to follow the Ibero Tours ECJ judgment to the effect that a discount offered by an agent at his own expense does not affect the VAT on the amount paid for the supply.
The Supreme Tax Court has rejected a tax office income adjustment cancelling a write-down of an unsecured loan to a foreign subsidiary as the lack of security was, in the view of the tax office, not at arm’s length.
The ECJ has held that a non-resident taxpayer must be able to deduct an annuity paid in consideration for a business interest on the same lines as a resident.
The finance ministry has published a list of documents to be produced by unit holders in “non-transparent” investment funds if they wish to avoid taxation on punitive deemed income.
The Supreme Tax Court has rejected a tax office attempt to requalify a repayment of share capital as a dividend merely because the repayment was not specified precisely in the capital reduction Resolution.
The Supreme Tax Court has held that a dividend payable by a solvent subsidiary to its shareholder with a controlling interest is generally taxable income for the latter on the date of the resolution regardless of a resolution for a later date of payment.
The Supreme Tax Court has held that a business of uncertain residence that has invoiced its German sales with VAT must recover its input tax through the return that must be filed, regardless of whether the VAT invoices were rightly or wrongly issued.
An ECJ advocate general has suggested the court hold the provision of a warranty by an independent business for certain components and assemblies within used cars sold by a dealer is an insurance, the premium for which should be taxed as such.
The ECJ has held that UK group relief provisions that restrict losses incurred by foreign subsidiaries to those that cannot be offset in the same or a previous year in the foreign country or – as apparent immediately after year-end – in a future year are not in breach of community law.