Tax & Legal

In its judgement of 18 March 2026 ( III R 20/24), the Supreme Tax Court clarified the requirements for proving a willingness to undertake vocational training under child benefit law. The court thereby confirmed the strict line that a mere assertion that a child is willing to undertake vocational training is not sufficient to establish an entitlement to child benefit.

If a natural person engages in multiple commercial activities, these activities may be considered as one business or as multiple independent businesses either because the activities are of the same type or different in nature. As the Supreme Tax Court pointed out in a most recently published judgment, this depends on the economic, organizational, and financial circumstances.

In a recent judgment, the Supreme Tax Court decided that a participant in tax evasion - here: as assistant - cannot be held liable through a notice of liability. The exception from the exemption from liability as provided in Section 191 (5) Sentence 2 of the General Tax Code in cases where the tax assessed is statute-barred applies only to those who have personally committed tax evasion or tax fraud.

In a recently published judgment, the Supreme Tax Court decided that a fee may be charged for each individual request for binding advance ruling and that the number of requests is determined by the underlying facts as a single course of events. The judges further concluded that the fees for providing the requested information are not subject to the statute of limitations and the collection of these fees is not unconstitutional, even if the requested advance ruling is denied.

In a most recent judgment, the General Court of the EU decided that national legislation requiring a 100 percent ownership interest to qualify for a VAT group to be incompatible with EU law unless that condition is a necessary and appropriate measure to achieve the objectives of combating tax evasion or avoidance. The Court also found that taxpayers cannot directly invoke the provisions of the VAT Directive.

The Federal Government has presented a comprehensive action plan aimed at strengthening the fight against tax evasion, financial crime, money laundering and related forms of organized crime. The package is intended to pool responsibilities, increase investigative pressure, modernize data-based enforcement and ensure that serious tax offenses are sanctioned more effectively.

The German federal government has adopted a draft bill to modernize German cooperative law. According to a press release issued by the Federal Ministry of Justice and Consumer Protection (BMJV), the draft bill adopted on July 15, 2026, is intended to accelerate the formation of cooperatives, further promote digitalization, and strengthen safeguards against the misuse of the cooperative legal form. In particular, the draft bill provides for the following key changes:

Today, the European Commission and the United Kingdom have signed the EU-UK Agreement in respect of Gibraltar. Once the Parliament's consent is obtained, the Council can proceed with the adoption of its decision on conclusion of the Agreement.

In a most recent decision, the General Court of the EU held that a person appointed as tax representative may be liable for payment of the VAT and that a tax representative who is not appointed as the person liable for payment of VAT but who is responsible for various formal administrative functions (e. g. carrying out VAT filing obligations) cannot be held jointly and severally liable for the VAT due given the observance of the principle of proportionality.

In a most recently published decision, the Supreme Tax Court held that a group of natural persons who are not organized in the legal form of a partnership or another corporation or a community of heirs is not considered as a legal entity under civil law or real estate transfer tax law and cannot therefore be a controlling company within the meaning of Section 6a Sentence 3 Real Estate Transfer Tax Act which governs the tax exemption for group restructurings in cases of the unification of shares.

A taxpayer will not be considered to be a cross-border worker (“Grenzgänger”) within the meaning of Article 15A paragraph 2 of the 1971/2010 Double Taxation Agreement with Switzerland (DTA Switzerland) if a return to his place of residence is not possible or not reasonable for professional reasons. This is determined based on the circumstances of the individual case, in particular work-related factors, and cannot be decided solely on the basis of general criteria, especially a fixed distance between the place of residence and the place of work. So held the Supreme Tax Court in two separate decisions.

The EU Commission calls on Germany, France and Italy to adapt its local tax legislation of dividends received from subsidiaries in other Member States to the Parent-Subsidiary Directive.

In a recent announcement, the Federal Ministry of Finance (MoF) has amended the Application Decree for the Tax Code -which was last amended by the MoF letter dated March 17, 2026 - effective immediately. The focus is on adjustments in the area of non-profit status.

In a recently published judgment, the Supreme Tax Court reaffirmed its strict position that, in the case of a direct change in shareholders, it is irrelevant whether the new shareholder under civil law (in this case: the trustor) previously held an indirect interest in the partnership.

The value for gift tax of a limited partnership share which is gratuitously transferred to a related party may be calculated by using the capitalized earnings value method in order to determine the "sustainably achievable annual yield" and to correct one-time expenses. In these circumstances, the expense of a fine imposed for an antitrust violation must be added back to the relevant baseline profit, the Supreme Tax Court said in a most recently published decision.

The Supreme Tax Court decided that a simply signed legal statement prepared by an attorney does not meet the requirements for electronic legal communications under the Code of Procedure of Fiscal Courts unless it is transmitted to the court via a designated transmission channel specified therein. In the event the deadline for filing a lawsuit has been missed, reinstatement into the status quo ante may be granted regardless of the plaintiffs‘ fault if the court itself violated its duty of care.

The German Supreme Tax Court (BFH) ruled on 20 May 2026, that the Baden-Württemberg state real property tax law is not unconstitutional, and affirmed the law’s provisions for real property valuation used in property tax calculations starting 1 January 2025.

At the plenary session on 12 June 2026, the Bundesrat unanimously approved amendments to the Tax Consultancy Act that the Bundestag had only passed the previous evening.

On 2 July 2026, as part of the Federal Government's Programme for Economic Recovery and Employment, the coalition parties announced the results of the coalition committee’s deliberations. These also include changes to tax law.

In its decision of today, the General Court held that the VAT exemption for “the management of credit by the person granting it” under Article 135(1)(b) of the VAT Directive does not apply in a case where the credit is sold to a third company and whilst the management of that credit is retained by the seller.