On 25 January 2017 the federal government approved a draft of the Act to Combat Harmful Tax Practices in connection with the Licensing of Rights. The intention is to prevent multinational businesses from transferring their royalty income to countries, which offer such income preferential treatment. Such preferential tax regimes (so-called Licence Boxes, Patent Boxes or IP-Boxes) are considered not to meet the demands of the OECD and G20 BEPS Project. A new provision is to be introduced to the Income Tax Act (ITA) for this purpose; the new provision should be applied to expenses arising after 31 December 2017.
Advocate General Kokott is of the view that the Commission erred in deciding that Luxembourg had granted unauthorized state aid to Amazon in the form of tax advantages.
The Supreme Tax Court has held that the withholding tax on royalty payments to licensors in other EU states should be on the net amount after deduction of direct costs.
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 ECJ has held that the withholding tax on a royalty paid to a corporation in another EU country may not be more than the corporation tax rate applied to the income less the directly related costs.
The Supreme Tax Court has held that the treaty attribution of the royalty income charged by a US partner is to his US business. Accordingly, it is not taxable in Germany as partnership profits.
Once again, the European Court of Justice was asked to define the criteria for a voucher from a VAT point of view. The request for a preliminary ruling from the Swedish Supreme Administrative Court concerns a loyalty program with points earned based on the purchase price which can be redeemed later in a “points shop” in connection with a future purchase. The court held that loyalty points of this kind do not constitute a “voucher” within the meaning of Article 30a of the VAT Directive.
On 25 January 2017 the German government published a draft bill proposing a restriction of tax relief on royalty payments made to related parties from 2018 onwards.
The issue of points following a purchase of goods in the course of a customer loyalty program where the customer is entitled to a rebate when making a future purchase does not constitute a voucher within the meaning of Article 30a of the VAT Directive. In the Opinion of the Advocate General there is no (self-standing) obligation to accept those points as consideration for a supply of goods. Therefore, such a bonus system constitutes only a discount on a future purchase.
On 24 June 2026, the European Commission published two packages aimed at simplifying various corporate tax directives. The first package, a so-called “Tax Omnibus Package” proposes changes to the Parent-Subsidiary Directive, the Interest and Royalties Directive, and the Merger and Dispute Resolution Directives. The second package is intended to serve as a “DAC Recast,” under which certain thresholds for reporting obligations will be modified or abolished, corporate groups subject to Pillar 2 will generally be exempted from DAC6, and other amending directives related to DAC (the Mutual Assistance Directive) will be adapted or consolidated. The packages are designed to modernise the EU's direct tax framework, make it more efficient and better adapt it to the current economic environment, whi ...
In its sitting on 2 June 2017 the Bundesrat (the Upper House) approved the Act to Combat Harmful Tax Practices in connection with the Licensing of Rights.
The Supreme Tax Court has held that the import value of film DVDs shall include an uplift to the purchase price to reflect royalties payable by the subsequent purchasers on their proceeds from hiring or selling the films. This uplift can be estimated.
The circular dated 11 February 2021 covers royalty payments and capital gains in foreign-to-foreign cases where the German nexus is purely based on a registration of rights in a German public register
The finance ministry has accepted as a precedent a Supreme Tax Court ruling that a premium paid to a former employee for an invention during his employment should be taxed as a royalty, rather than as employment remuneration, but insists that employers may only apply the principle if they hold an exemption certificate from their local tax office.
The European Court of Justice (ECJ) confirms in his most recent judgment that the Commission has not established that the tax ruling given to Amazon by Luxembourg was a State aid that was incompatible with the internal market.
In a most recent judgment, the Supreme Tax Court decided that the trade tax addback of a silent partner's profit share is subject to the free movement of capital which also applies to third countries (here: the USA). The application of the "grandfather“ clause of Art 64 TFEU (ex-Article 57 TEC) is generally not affected by statements made in a letter from a lower tax authority.
In a recently published decision, the Supreme Tax Court held that, when determining a late filing penalty as part of a discretionary measure of the tax authorities pursuant to Section 152 (1) Sentence 1 of the General Tax Code, the frequency of missed deadlines must be taken into account even in cases of refunds.
In a most current judgment, the Supreme Tax clarified the procedural and substantive handling of a late filing penalty when a VAT assessment is amended to a taxpayer's benefit (surplus) during ongoing litigation.
