The Supreme Tax Court has held that the value of a contribution in kind under the Reconstructions Tax Act 1995 as taken up by the recipient is binding on the contributor. Changes in retrospect are binding on both parties.
The profit from the sale of a share in the upper-tier partnership as prescribed in Section 7 sentence 2 no. 2 Trade Tax Act is not to be allocated to the hidden reserves of the upper-tier partnership and the hidden reserves of the lower-tier partnership. It is rather a single and uniform sales transaction at the level of the upper-tier partnership, the Supreme Tax Court said in a most recently published decision.
The finance ministry has issued a decree easing the formalities to be followed by those wishing to contribute to the support for the victims of the recent Elbe and Danube flooding.
In its meeting today, the Bundesrat (Federal Council) by and large adopted the various demands and requests for review made by its committees in their representations on the Finance Bill 2022.
The Supreme Tax Court has held that distributions to shareholders may only rank as a (tax free) return of a capital contribution if they do not exceed the balance brought forward at the beginning of the year.
In a recently published interim decision, the Supreme Tax Court expressed considerable doubts as to the legitimacy of the German Energy Crisis Contribution Act which was in force for years 2022 and 2023.
Since the wording of Section 27 (7) of the German Corporation Tax Act does not cover estates, private foundations under civil law with legal capacity are not eligible for the specific determination of the special tax contributions account which is necessary to establish the amounts of tax neutral repayments of capital contributions. This was decided by the Supreme Tax Court in two similar cases. Contrary to the view held by other local tax courts the Supreme Tax Court gives precedence to the strict wording of the law.
The Supreme Tax Court has held that an employer’s pension fund contribution paid on behalf of an employee is not taxable merely because it was described as a payment on behalf of the employee.
In a recent ruling, the (lower) Tax Court of Hamburg decided that the disproportionate contribution to the free capital reserve of a partnership limited by shares is not a transaction that is subject to gift tax.
In a most recent decision, the Supreme Tax Court held that profits from special compensation for the general partner of a limited partnership pursuant to Section 5a (4a) sentence 3 Income Tax Act attributable to the period following the cessation of the commercial and promotional activity of a partnership are not part of the trading profit subject to trade tax.
The Supreme Tax Court has again held that the real estate transfer tax due on a contribution of a shareholding in another company is to be written off as a current operating expense.
The Regional Tax Court of Rhineland Palatinate has decided that contributions to the US 401(k) retirement plan deducted at source from the employee's salary are to be taxed as income from employment in Germany.
The Supreme Tax Court has held that the employer contributions to a legally compulsory pension fund are tax exempt in Germany. Voluntary contributions are a taxable benefit.
The German refusal of a deduction for social security contributions paid by a German resident French government official does not meet the EU-requirement for free movement of workers, since its effective exclusion under German law placed her at a comparative disadvantage vis-à-vis her German colleague.
The transfer of shares to German-residents shareholder as part of a US spin-off generally constitutes investment income under Section 20 (1) No. 1 of the Income Tax Act (ITA); Section 20 (1) No. 1 Sentence 3 ITA is to be interpreted in line with EU law, so that companies resident outside the EU may also repay capital contributions on a tax neutral basis, even though they do not maintain a contributions account for tax purposes under Section 27 of the Corporation Tax Act (CTA).
According to a decision of the Supreme Tax Court, the mere fact that a foundation returns the amount it previously received from the donor to the latter within a short period of time as an interest-bearing loan and uses the interest income earned to promote its tax-privileged statutory purposes is not in itself a reason to deny the tax-deductibility of the contribution as donation.
The finance ministry has decreed that employer contributions to the social security systems of other member states of the EU/EEA and of Switzerland shall be a tax-free benefit for German resident employees up to the level of the equivalent German charge.
The failure to tax the deemed capital gain under Section 17 (1) Sentence 2 Income Tax Act at the level of the shareholder in the case of a hidden contribution of shares in a corporation is not a reduction in income as provided in Section 8 (3) Sentence 4 Corporation Tax Act which would otherwise result in an increase in taxable income. This was decided by the Supreme Tax Court in a recently published judgment.
The change in the shareholder structure of a limited property-owning partnership due to a contribution of the limited partners' shares in the partnership to a shelf-company may be exempt from real estate transfer tax pursuant to Section 6a sentence 1 RETT Act provided that the transferor, i. a., held at least 95% of the shares directly or indirectly or partly directly for an uninterrupted period of five years before the legal transaction took place. This was decided by the Supreme Tax Court in a most recent judgment.
