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.
In a most recently published decision, the Supreme Tax Court held that a disability compensation received by a former member of the U.S. Armed Forces for an injury suffered in the line of duty is tax-exempt under Section 3 No. 6 Income Tax Act.
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.
