Tax & Legal

Two decisions of the Baden-Württemberg Tax Court have been published in connection with the attribution of foreign passive income for trade tax purposes. In these decisions the Court also raises doubts as to whether the add-back of this type of foreign income is compatible with EU law.

The publication of the decision of the European Court for Justice (ECJ) in the Hornbach-Baumarkt case is scheduled for 31 May 2018.

The Supreme Tax Court has held that the foreign passive income attributed to a domestic parent is to be seen as stemming from a foreign business establishment and is therefore exempt from trade tax.