Tax & Legal

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    Tax & Legal

      Curtailment of loss relief for companies in part unconstitutional

      The German Constitutional Court held that the rules for curtailment of loss relief on change of shareholders to be in breach of the formal provisions of the constitution under the principle of equal treatment insofar as changes of more than 25% and up to 50% of the shares in a company within a period of five years are concerned.

      Loan interest subject to profits: Interest or profit sharing under Austrian treaty?

      In a dispute between Germany and Austria on the right of taxation of payments from registered certificates an ECJ advocate general has suggested that such interest should be taxed only in the country of residence of the beneficial owner unless such debt-claims explicitly provide the creditor with a participation in the debtor’s profits.

      Municipality as a business for VAT

      In a recent decision the Supreme Tax Court dealt with the provision of services by public bodies under German VAT law. If the economic activities of a public body are not outstanding and distinct from its overall activities it is not a taxable business for VAT and thus not eligible to deduct input VAT incurred on the underlying costs.

      Preemptive warnings to competitors subject to VAT

      A company dealing in the field of electronic data processing served its competitors with prior written warnings due to violations of general business terms and conditions and received reimbursement of the expenses incurred. The tax office assumed a taxable service being subject to VAT. The Supreme Tax Court confirmed this view.

      OECD publishes International VAT/GST Guidelines

      The International VAT/GST Guidelines now published present a set of internationally agreed standards and recommended approaches to address the issues that arise from the uncoordinated application of national VAT systems in the context of international trade. The Guidelines were adopted as a Recommendation by the Council of the OECD in September 2016.

      Leaving the EU: Brexit and its impact on German businesses

      The time has come to say goodbye: Today UK Prime Minister Theresa May formally invoked Article 50 of the Lisbon Treaty thus initiating the formal negotiations for her country’s departure from the European Union. A PwC special report looks at the potential outcome with respect to tax, legal and people.