The finance ministry has issued a decree on extended deduction provisions for donations, sponsoring and other support given to the victims of the natural and nuclear disasters in Japan.
The Supreme Tax Court has disallowed an expense deduction up to the higher lump-sum amount for accommodation on business travel, where the employer bore the actual amount payable.
The Supreme Tax Court has held that if a pooled work space can lead to an employee’s being forced to work from home, he can become entitled to a home office deduction.
Under the extended trade tax deduction, rental income derived by entities whose activities are limited to the administration of their own real property is deductible from the trading income subject to trade tax. The Grand Senate of the Supreme Tax Court held that this trade tax deduction is also available for a commercial GmbH & Co. KG with respect to its interest in a pure asset-management civil law partnership.
The Supreme Tax Court held that a business expense deduction for common civil clothing is excluded even if it is usually worn when carrying out the work as funeral speaker.
The Supreme Tax Court has asked the European Court of Justice (ECJ) for a preliminary ruling on the input tax deduction of a functional (operating) holding company from certain input costs.
Following a preliminary request from Romania, the European Court of Justice (ECJ) had to deal with the refusal of the local tax authorities on the right to input VAT deduction if services are not used for taxable transactions. Specifically, it refers to the VAT deduction for intercompany consultancy and administrative services with a supplier located in a country different than Romania.
An ECJ advocate general has asked the court to rule that a German deduction for personal expenses be extended to non-residents if they would not have had the income without the obligation.
The Supreme Tax Court has upheld the letter of the law providing that a credit note loses its invoice status as a voucher for input tax deduction on rejection by the recipient – regardless of whether or not the rejection is justified.
Following decisions of the European Court of Justice and the German Supreme Tax Court the Federal Finance Ministry has issued guidelines on the VAT grouping and the input VAT deduction for holding companies. In a special VAT Newsflash our tax experts take a closer look on the situation as a whole.
The Supreme Tax Court decided that a secondary (ancillary) activity to the holding and management of own property which is not expressly permitted by Section 9 No. 1 Sentence 2 Trade Tax Act (in the case in dispute: keeping classic cars for the purpose of appreciation of value), can also preclude an extended trade tax deduction even if no income is generated.
In a recent judgement the European Court of Justice (ECJ) has clarified that it is contrary to the freedom of establishment to deny the deduction of interest costs on a loan from a normally taxed group company, if this would not have happened had the loan been granted from a normally taxed Swedish group company instead.
For the purposes of input VAT deduction, the necessary information about the tax point (the date of the supply) may be inferred from the date on which an invoice was issued, if it can be assumed that the service was provided in the month in which invoice was issued.
The finance ministry has decreed that a Supreme Tax Court ruling allowing a taxpayer a deduction for the costs of pursuing a civil claim for damages should not be followed as a precedent for other cases.
The Supreme Tax Court has referred a question to the ECJ as to whether the exclusion of deduction for a private pension paid by a non-resident in return for the transfer of ownership rights in a business is in breach of community law.
If the parties to a rental agreement mutually and prematurely settle the ongoing dispute on the validity of the rental agreement by way of final payment of the lessee, the lessor is entitled to claim the extended trade tax deduction for use of own real estate according to Section 9 No. 1 2nd Sentence Trade Tax Act.
According to a decision of the Supreme Tax Court, commercial property trading - which is harmful for the extended trade tax deduction - may be precluded under specific circumstances of the individual case if neither property sales nor preparatory measures are carried out within the five-year period and several property sales occur only in the sixth year.
