In today’s judgment, the General Court of the EU held that Union law precludes the German practice whereby the taxpayer's good faith in fulfilling the conditions for the margin scheme is not taken into account already during the tax assessment procedure but rather considered later in separate proceedings for equitable relief.
The Council of the European Union has updated its list of non-cooperative tax jurisdictions, reaffirming its focus on tax transparency, fair taxation, and action against tax avoidance.
In a recently published decision, the Supreme Tax Court took the opportunity to clarify and further develop the established principles regarding financial integration as a requirement for the existence of a VAT group within the meaning of Section 2( 2) Number 2 of the German Value-Added Tax Act.
In a recent judgment, the Supreme Tax Court held that, regarding the tax exemption for certain corporate group reorganizations under Section 6a of the Real Estate Transfer Tax Act and following a split-up in accordance with the Reorganization Act, a stake held by the split-off company in a subsidiary of the acquiring company for more than five years must be attributed to the acquiring company as partial universal successor if the shareholding in the subsidiary was the subject matter of the relevant acquisition agreement.
For an insolvent debtor, the insolvency administrator’s fees may be deductible as current or subsequent business expenses, provided the insolvency administrator’s management activities help to satisfy the insolvent debtor’s business liabilities. With this recently published decision, the Supreme Tax Court has clarified, in principle, an issue of great practical importance in cases of insolvency proceedings.
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.
In a recent judgment, the Supreme Tax Court decided that the statutory interest levied on late payment or refund of value added tax amounts pursuant to Section 233a of the General Tax Code does not contravene EU law.
According to the Supreme Tax Court (I R 20/23) in a recently published decision, a pre-constituted dependent family foundation (“vorkonstitutionelle unselbständige Familienstiftung”) administered by a local authority qualifies as a private-law foundation without legal capacity under Section 1(1)(5) of the Corporation Tax Act, even if its approved statutes designate it as a public-law foundation. Its legal character depends on the overall circumstances—particularly its purpose and organisational structure—rather than on the wording of its statutes alone. Because the foundation primarily served private family interests and was not integrated into the state administration, it was subject to unlimited corporate income tax liability.
If a valuation report is prepared for an inherited property and if that same property is then sold a few months later for a purchase price significantly higher than the value determined in the appraisal, the Supreme Tax Court clarified that neither the appraisal nor the purchase price takes precedence from the outset. However, under certain conditions a properly prepared value appraisal may be suitable as evidence of the lower fair market value.
Certain care facilities are exempt from trade tax if, in at least 40 percent of cases, the costs of care are covered in full or for the most part by statutory social insurance or social welfare providers. According to a decision of the Supreme Tax Court, this also applies if the services are billed through a third party.
In three judgments, the Supreme Tax Court held that breakfast services provided to hotel guests, as well as access to fitness and wellness facilities, are not subject to the reduced tax VAT rate under Section 12 (2) Number 11 of the Value-Added Tax Act, and that this does not contravene EU law.
Relinquishing domestic residence could lead to significant tax liability for shareholders of small and medium-sized businesses - even without selling their shares. How come? Under Section 6 of the Foreign Tax Act, such change of residence is treated as a sale of the shares (and taxation of the built-in gains) if certain minimum ownership requirements are met. Here is some information as to the current requirements, the key restrictions and changes in the statute, but nevertheless also some opportunities for taxpayers.
The Federal Cabinet has approved the draft bill from the Federal Ministry of Finance (BMF) on the further development of till records and the fight against tax evasion, as well as the continued digitisation of commercial and tax records.
In a recent decision the Second Senate of the Federal Constitutional Court discontinued proceedings arising from two referrals by the Supreme Court under Article 100(1) of the Constitution in relation to flat rate payroll tax on withdrawals from pay-as-you-go supplementary pension schemes.
In a recent judgment, the Supreme Tax Court confirmed that, when determining whether the profit threshold for claiming the investment deduction allowance has been exceeded, off-balance-sheet adjustments must also be taken into account, including trade tax, which must be added as a non-deductible business expense pursuant to Section 4(5b) of the Income Tax Act .
In a most recently published decision, the Supreme Tax Court commented on the distinction – from a VAT point of view - between brokerage services and own-account transactions on online booking platforms: If an intermediary company clearly presents itself to the consumer as a broker, it cannot be legally be the provider of the core service unless it has actually rented the vehicle itself first, the Supreme Tax Court said.
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.
