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.
The Supreme Tax Court decided that the actual trade tax liability of a real estate trader arises at the earliest with the conclusion of the purchase agreement for a first property. It is only after the completion of the purchase that he is in a position to offer his services on the market.
On 16 October 2023, the long-awaited joint decrees (issued by the Supreme Tax Authorities of the Federal States) on the attribution of real estate for the purposes of the taxation of share deals (Section 1 (2a) to (3a) RETTA) became available.
These adopt the previous case law of the Supreme Tax Court from 1 January 2021 (II R 44/18) and 14 December 2022 (II R 40/20) and illustrate the legal opinion with examples.
