The ECJ has held that a provision requiring notaries to surrender to the state part of their fees for registering changes in legal form conflicts with the prohibition on “other taxes” in the Capital Duty Directive.
Membership fees paid to a charitable organization that promotes cultural activities which mainly serve the furtherance of recreational and leisure activities are not deductible as special personal expenses for income tax purposes.
In a most recent judgment following a preliminary request from Finland, the European Court of Justice has once again confirmed that specific fees and commissions associated with debt collection are subject to VAT.
The Supreme Tax Court decided that maintenance fees incurred under leasing agreements must also be added back to the income subject to trade income tax.
The Supreme Tax Court decided that expenses for a gym membership are generally not tax deductible as personal extraordinary and inevitable expenses. This also applies if the participation in a medically prescribed functional training program requires a membership in the gym.
A professional soldier was convicted of a criminal offense and also had to undergo military disciplinary proceedings. At least he can deduct the legal costs of the disciplinary proceedings as income related expenses, the Supreme Tax Court said in a most recent decision.
Tax consultancy expenses incurred in connection with the preparation of the tax return and the determination of the profit from the sale of a shareholding in a corporation are not tax-deductible costs of disposal within the meaning of Section 17(2) sentence 1 of the Income Tax Act.
The Supreme Tax Court has asked the ECJ to rule on whether the fees charged to a fund by an investment consultant for specific disposition recommendations are free of VAT as fund management.
The FIFA rules for international football require that only registered transfer agents may generally act as such on behalf of players and clubs. They are prohibited from acting for both sides in the same deal. The Supreme Tax Court has held that a club may only deduct the input tax in an agent’s invoice if it is clear from the facts that the agent was truly acting on the appointment and on behalf of the club.
In a recently published judgment, the Supreme Tax Court decided that only one fee for processing a binding information (advance ruling) may be charged to several applicants if the information is provided to the applicants in a uniform manner and on the same subject.
In a Romanian case, the ECJ decided that a contract providing for the processing of the application for VAT refunds from the tax authorities of several Member States is to be a "supply of services" within the meaning of Article 57 TFEU. Furthermore, the ECJ stated that the tax exemption for transport services in connection with importation cannot be denied from the outset if other qualifying documents are presented to support the importation. The levy of withholding tax on handling fees paid to a foreign service provider was also dealt with by the ECJ.
The finance ministry has published an extensive decree on the procedures to be followed when accounting for withholding taxes on the fees paid to non-resident artists, athletes, actors and entertainers.
The finance ministry has announced that it considers negative interest charged by banks on deposits as a non-deductible expense and interest paid by banks on refunds of loan handling fees as income subject to withholding tax.
In a most recently published decision, the Supreme Tax Court commented on the VAT situation regarding membership fees for non-profit sports clubs and held that they may be subject to VAT. However, it must be verified whether the sports club provides its members with a single service or several separate services, and whether this constitutes a tax-exempt transaction or one subject to VAT.
The tax courts had to clarify whether an "arrangement fee" and an "agency and security agency fee" are to be included as interest expenses when determining the interest limitation under Section 4h (1) of the German Income Tax Act. The tax authorities were of the opinion that both fees are to be included insofar as they are payable to the lender. The Supreme Tax Court held that the agency fee must be regarded as interest expense, but that the situation is different for the arrangement fee.
Part of the fee payable by the foreign client which is initially retained in anticipation of a potential foreign withholding tax liability of the German self-employed contractor is not immediately subject to income tax in the hands of the latter. According to a ruling of the Supreme Tax Court, the fee withheld is only subject to German income tax if the foreign customer settles the foreign (withholding)tax liability incurred on the total amount of the agreed fees.
According to the Supreme Tax Court in its ruling of 25 July 2019 (III R 22/16), published on 7 November 2019, fees paid by a tour operator to hoteliers for the provision of hotel rooms are not subject to the trade tax add-back.
Considering the general context and framework of the German media law, the “broadcasting license” issued to a private broadcaster of radio or television programs is not, from a purely tax point of view, to be treated as an intangible asset for which capitalization in the tax balance sheet is mandatory. According to the Supreme Tax Court this is for want of a sufficient enough economic transferability of the broadcasting license. The fees paid in connection with the admission as regional TV-station, as in the case of dispute, are in general immediately tax deductible.
In a reference for a preliminary ruling from Bulgaria the European Court of Justice is asked whether – in absence of consideration for a service due to the uncertainty of a contingency fee - the advice given by a lawyer against statutory minimum fee payable by the unsuccessful opposing party in the event of a successful outcome is a taxable transaction within the meaning of the VAT Directive. The Advocate General considers this to be a transaction subject to VAT in contrast to the ECJ case law which, in her opinion, has led to some uncertainty and likely misinterpretations in practice.
The Federal Ministry of Finance has officially clarified in a circular published in April that fees or remunerations paid for the placement of online advertising are not subject to German withholding tax under Section 50a paragraph 1 No. 3 Income Tax Act.
