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.
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 finance ministry has decreed that a royalty debtor may not deduct expenses of the EEA royalty creditor from the gross royalty subject to withholding tax unless the expense was incurred solely in respect of the given licence.
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 grand senate of the Supreme Tax Court has held that a tax acceptable home office must be a separate room in the taxpayer’s home not used for any other purpose.
The Supreme tax court has held that bribes received are taxable as other income with the consequence that any damages payable later cannot be offset against income from other sources.
In a decision published on 14 December 2023 on Section 4 (4a) of the German Income Tax Act (restriction of deductible interest expense in the case of excess drawings), the Supreme Tax Court decided that the rule whereby Section 4 (4a) Income Tax Act (ITA) is to be applied for each business in isolation – a so-called business-related application - also applies to multi-level partnership structures. As a result, the transfer of a rolled-over profit in accordance with Section 6b ITA (roll-over relief) to another legal entity does not lead to a contribution to the transferring legal entity - (i.e. a contribution which would reduce the level of excess drawings) - due to the fact that no contributable asset was involved.
The Supreme Tax Court has rejected a tax office attempt to assume a customer’s premises as an employee’s regular place of work merely because of a long term assignment.
The Supreme Tax Court has held that the compulsory pension insurance contributions of a German resident employee working in Switzerland are incurred in connection with tax-free income and are therefore not deductible in Germany.
The Supreme Tax Court has held that restricting a trade tax privilege to domestic units of a tax group does not infringe a group’s freedom of Establishment.
On 31 May 2022, the German Federal Ministry of Finance (MoF) published a circular on the salary withholding tax treatment of supplementary payments by employers to employees' expenses for local public transport during the period in which the so-called 9-Euro-Ticket is available.
The circular provides practical guidance on the application of the tax exemption of Section 3 Number 15 of the German Income Tax Act (ITA) vis-à-vis the 9-Euro ticket
The Constitutional Court has held the blanket disallowance of 5% of dividends and capital gains realised by companies to be constitutionally acceptable.
The ECJ has held that a non-resident taxpayer must be able to deduct an annuity paid in consideration for a business interest on the same lines as a resident.
An ECJ advocate general has suggested the court hold that the 5% effectively connected expense add-back for foreign dividends infringes a company’s freedom of establishment if an otherwise comparable domestic company could avoid the add-back by joining a tax group.
