Tax & Legal

In a recent judgment, the Supreme Tax Court held that the plaintiff, as a self-employed marine and harbor pilot, does not maintain a permanent establishment within the meaning of Section 4 (5) Sentence 1 No. 6 of the Income Tax Act. Therefore, the deduction of business expenses for travel costs is not limited to the mileage allowance.

In a request for a preliminary ruling from Italy regarding state aid, the European Court of Justice decided that an ‘undertaking in difficulty’ may not benefit from advantages provided for undertakings with high consumption of natural gas or electricity.

In a most recently published judgment, the Supreme Tax Court held that a self-employed person is considered to maintain two households only if he or she maintains a separate household outside the location where he or she primarily carries out his or her business activities and also resides at the location where he or she primarily carries out those activities. In any case, the primary focus of the entire business activity of a self-employed person is at the place where he or she pursues the sole business (permanent establishment) in the context of Section 4 (5) Sentence 1 No. 6 Income Tax Act.

Market development grants paid to a foreign associated company may comply with the arm’s length principle and qualify as deductible business expenses where they are intended to increase licence income and therefore do not constitute withdrawals. Expenditure on foreign market development expenditure may constitute the acquisition cost of an intangible asset comparable to goodwill, including where that asset is created for the first time through an acquisition for consideration.

Last week, the Members of the European Parliament approved a major reform of the EU Customs Code that introduces stricter rules for e-commerce and establishes a new customs authority.

A draft bill prepared by the German Federal Ministry of Finance (BMF) has emerged, proposing a fundamental reform of the taxation of certain crypto assets held as private assets.

When forwarding a written document from a firm’s post office box belonging to an authorized tax consulting firm, the professional who signs the document with a simple signature and the professional who initiates the mailing do not have to be the same person, the Supreme Tax Court said in a most recently published decision. However, it is required that both the licensed professional who signs the document and the licensed professional who initiates the mailing be authorized to represent the tax consulting firm.

In a most current decision, the Supreme Tax Court clarified that a financial loss is not considered to be of personal nature simply because the person who caused the damage is a family member or because a special relationship of trust existed. The decisive point is whether the cause of the loss caused by criminal acts stems from business activities which must be established beyond any reasonable doubt.

In a recently published judgment, the Supreme Tax Court decided that hidden reserves from a reserve established in a partnership may, pursuant to Section 6b (3) of the Income Tax Act, also be transferred to the acquisition costs of assets of a partnership limited by shares in which the partners hold an interest as general partners.

On 17 September 2026, the Federal Ministry of Finance published a circular on the recognition and valuation of pension provisions in the tax balance sheet under Section 6a Income Tax Act (“ITA”) in respect of pension commitments that depend on future events such as the performance of the underlying securities.

A tax authority is not required to certify under oath that the information it provided regarding data protection is accurate and complete. In a most recently published judgment, the Supreme Tax Court does not see any legal grounds for this. The court went on to say that it is generally assumed that the information provided is complete and accurate.

According to a recent decision of the Supreme Tax Court, the energy price allowance paid to employees in 2022 is taxable as income from employment. Section 119 para. 1 sentence 1 Income Tax Act, as contested by the plaintiffs, is not unconstitutional.

In a recent judgment, the European Court of Justice held, among others, that the margin taxation for travel services applies even when a taxpayer purchases tourist services - in particular transportation services - from third parties to sell them to consumers during excursions and thereby realizes a negative margin. However, no VAT refund is possible in case of an overall negative margin.

In two decisions from today the European Court of Justice commented on the conditions under which an individual may obtain redress following a decision of a court or tribunal that is contrary to EU law. It confirms, inter alia, that the rule breached must confer rights on individuals and that the wrongful failure by the national court or tribunal to question the Court of Justice as to the interpretation of that rule may help to establish liability.

The Baden-Württemberg Tax Court decided that maintaining a double household cannot be justified in the absence of a permanent residence at the out-of-town work location if the employee lives in a motorhome there during the week but regularly returns to his family home on weekends using the motorhome for transport.

In a most current judgment, the Supreme Tax clarified the procedural and substantive handling of a late filing penalty when a VAT assessment is amended to a taxpayer's benefit (surplus) during ongoing litigation.

The Federal Office for Economic Affairs and Export Control (BAFA) recently published two guidance documents regarding the application procedure designed to clarify the requirements set forth in the Industrial Industrial Electricity Price Directive, which took effect on 7 May 2026.

Following a request for a preliminary ruling from Belgium, the General Court of the EU held that a business owner must proportionally adjust the original input tax credit for a commercial building if he transfers the business and, at the same time, leases the building to the transferee on a VAT-exempt basis.

The European General Court of the EU handed down its preliminary ruling on the VAT treatment of the contribution of immovable property to a wholly owned company. The court found, among others, that EU members generally cannot restrict the no-supply treatment for full asset transfers unless justified to prevent competition distortion, tax evasion, or tax avoidance.

In a recently published judgment, the Supreme Tax Court decided that contributions made by parents to a support association for their children’s private school may, under certain circumstances, be treated as deductible school tuition for income tax purposes. However, expenses for lodging, care, and meals are not eligible.