In a most recent decision, the Supreme Tax Court held that the income tax payable on the compensation for loss of earnings which was subsequently reimbursed by the tortfeasor (injuring party) is subject to income tax in the hands of the injured party.
The correction of a final tax assessment notice pursuant to Section 50d (8) sentence 2 of the German Income Tax Act is only possible if – contrary to the provision in the double tax treaty - the employment income of an unlimited taxpayer has been wrongly included in the income tax assessment by omitting to produce proper documentation as required in Section 50d (8) Income Tax Act. It follows from this decision of the Supreme Tax Court that the possibilities of amending tax assessment under Section 50d (8) sentence 2 Income Tax Act are strictly limited and only apply in exceptional cases.
In a letter dated October 27, 2021, the German Federal Ministry of Finance sent a draft of the Corporate Income Tax Regulations 2022 (CITR) to the associations for comments.
On 7 March 2025, the Federal Ministry of Finance (MoF) published a revised circular on specific questions regarding the income tax treatment of certain crypto assets in Germany.
According to a ruling of the Supreme Tax Court, the compensation for use received in the context of the reversal of a consumer loan agreement after revocation is not subject to income tax.
In a most recent decision, the Supreme Tax Court held that winnings from online poker games can be subject to income tax. If a poker player plays regularly and successfully in poker tournaments, the gains are qualified as income from a trade or business.
In a most recent decision the Supreme Tax Court held that the sale of a separate undeveloped (garden) property is not exempt from income tax on the grounds that it was not before used for personal residential purposes.
According to a recent decision of the Münster Tax Court the energy price allowance paid to employees in 2022 is taxable as income from employment. Section 119 para. 1 sentence 1 Income Tax Act, as contested by the plaintiffs, is not unconstitutional.
According to the Cologne Tax Court, the preclusion of German employees resident in Switzerland for full assessment of German income tax is contrary to EU law. The court has referred the case to the European Court of Justice (ECJ) for a preliminary ruling with respect to the Agreement for the Free Movement of Persons between the EU and Switzerland.
UPDATE: In its session on 25 June 2021, the Bundesrat gave its approval to the Act to Modernise Corporate Income Tax Law. The Bundesrat thus followed the recommendation of the Finance Committee. The law is should enter into force on 1 January 2022.
According to a decision of the Supreme Tax Court, the 5-year preferential period in Section 35b sentence 1 of the German Income Tax Act starts at the time the inheritance tax arises, which is generally upon the death of the testator. This also applies if it was not possible to claim the tax reduction in due time by reasons for which the taxpayer could not be held responsible.
The Cologne Tax Court is of the opinion that the preclusion of German employees resident in Switzerland for full assessment of German income tax is contrary to EU law and had referred the case to the ECJ for a preliminary ruling. In his Opinion, the Advocate General considers that the German regulation contravenes the Agreement for the Free Movement of Persons between the EU and Switzerland.
In its judgement of 2 July 2025 ( XI R 27/22), the Supreme Tax Court ruled that a roll-over provision created incorrectly in accordance with Section 6b(3) of the Income Tax Act (ITA) must be corrected in accordance with the principles of formal balance sheet consistency.
The Supreme Tax Court decided that where a taxpayer decides to set off major maintenance expenses over a period of several years in accordance with Para. 82b of the Income Tax Implementation Regulations (“EStDV”) but dies before the full amount has been deducted, that part of the maintenance expenses not yet set off can be deducted as a rental income expense in the year of assessment in which the death occurred.
The European Court of Justice decided that the refusal of the option for full income tax assessment for German citizens living in Switzerland contravenes the principle of non-discrimination contained in the Agreement for the Free Movement of Persons between the EU and Switzerland.
In a recently published judgment, the Supreme Tax Court decided that the restriction for tax relief under Section 7i of the Income Tax Act to domestic historical monuments and therefore the disallowance of the increased depreciation for historical monuments located abroad to be, in principle, consistent with EU law.
The remuneration for waiving a right of usufruct to a private property is taxable as compensation in accordance with Section 24 No. 1 letter a of the Income Tax Act (ITA) if the owner of the usufruct right at the time of the waiver has actually leased the property and earned taxable income from rental and leasing. According to a recent decision of the Supreme Tax Court, this applies irrespective of whether the taxpayer receiving compensation for lost or foregone income was under legal, economic, or actual pressure at the time the agreement for waiver was concluded.
In a recent ruling, the Münster Tax Court had to decide on the income tax and treaty law treatment of a severance payment received by the plaintiff as a soldier in the British armed forces
The Supreme Tax Court held in its ruling of 10 December 2019 (IX R 23/18) that a final tax assessment can no longer be corrected by the tax office under Section 129 of the German Tax Code (“GTC” - obvious errors while issuing administrative acts) if the incorrect assessment of a capital gain whisch was correctly declared by the taxpayer under 17 of the German Income Tax Act was not based on a mere "mechanical error".
According to a decision of the Supreme Tax Court published on 21 October 2021, the loss of a silent partner's contribution, which is reflected as a partial write-down for tax purposes, does not fall within the scope of the loss utilisation restriction under Section 2a (1) Sentence 1 No. 5 in conjunction with Sentence 2 Income Tax Act (ITA).
