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.
Tax & Legal
The Supreme Tax Court has held that an upstream merger leads to new assets in the accounts of the parent (surviving entity) and thus to forfeiture of that company’s remaining loss carry-forward if the new assets are substantial.
Update ZollkodexAnpG: Bundesrat select committees ask for changes
The advocate general on an ECJ case on special case exemption from a loss curtailment provision has suggested the court hold the exemption rule to be of pre-accession provenance and thus not to be disapplied as unauthorised state aid unless and until the Commission has come to that conclusion on the basis of a properly completed formal proceeding.
The Supreme Tax Court has held the “minimum taxation” deferral of loss relief to be constitutionally acceptable.
The Supreme Tax Court has held that unused loss relief may only pass to transferee under the Reconstructions Tax Act up to December 12, 2006 if the loss making business was still held by the transferor on date of transfer.
The finance ministry has instructed tax offices to allow payment suspension requests on assessments to “minimum tax” where the future offset of the loss to be carried forward is excluded by law.
The Supreme Tax Court has held that even if a company is entitled to offset the loss of its foreign subsidiary at all, it cannot do so before the loss becomes irrecoverable.