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 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.
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.
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).
According to a decision of the Supreme Tax Court, where, within the framework of a multi-level partnership, an upper partnership, which indirectly participated in an asset transferred at book value under Section 6 (5) Sentence 3 Income Tax Act ("ITA"), changes its legal form into a corporation at book value, this will be considered an infringement of the retention period under Section 6 (5) Sentence 6 ITA
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 has decided that a gain arising from a share disposal can be rolled-over on a tax-neutral basis under Section 6b Income Tax Act where the privileged asset has been sold to a related entity. However, the Court also ruled that the part of the gain attributable to the write-up of the privileged asset – where the earlier write-down of the shares had reduced the taxable profits -could not be rolled over as a tax-neutral transfer under section 6b of the Income Tax Act.
The Supreme Tax Court has held that the treaty override clause in the Income Tax Act is to be ignored altogether where only part of the income is taxed in the foreign state.
Interest received by a US limited liability company from convertible bonds issued by a German debtor is subject to German withholding tax pursuant to Sec. 49 (1) No. 5 letter a Income Tax Act. This also applies if partial debentures were issued for these bonds. With its decision, the Supreme Tax Court put an end to the existing discussions and differing opinions in the professional literature regarding the correlation of two provisions in the Income Tax Act on that subject.
The Supreme Tax Court ruled that free or subsidized accommodation and meals provided by the employer in connection with preventive health services are generally not tax-exempt under Section 3 No. 34 German Income Tax Act.
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.
The Supreme Tax Court decided that a commercial partnership holding a share in a corporation as its sole activity in order to generate dividend income which is partially tax-exempt in accordance with Section 3 No. 40 Income Tax Act can deduct its ongoing administrative and consolidated group costs only in part because they are economically related to the partially tax-exempt income as defined in Section 3c (2) Sentence 1 Income Tax Act.
In a recent judgement, the Supreme Tax Court (BFH) ruled that partial loan forgiveness for professional development training constitutes taxable income from employment under Section 19 (1) Sentence 1 No. 1 of the Income Tax Act.
The Constitutional Court has held the treaty override provisions of the Income Tax Act making treaty exemption dependent upon proof of taxation or explicit exemption in the other state do not breach the formal provisions of the constitution if they took effect after enactment of the treaty.
Section 50d (9) Income Tax Act (ITA) excludes a tax exemption in Germany under a double tax treaty where, inter alia, the income is not taxed in the other treaty state.
At the beginning of November 2017 the Federal Finance Ministry published the long-awaited circular on its intended application of the rules (Section 50a Income Tax Act)applying to limited taxpayers and withholding tax on cross-border licensing of software and databanks.
The Lower Tax Court of Lower Saxony ruled that the allocation of shares in the course of a restructuring of Hewlett-Packard Company meets the requirements of a spin-off within the meaning of Sec. 20 (4a) Sentence 7 of the German Income Tax Act. Thus, there is no taxable distribution in kind at the time of the share allotment.
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.
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.
