In a recent decision the Supreme Tax Court held that the local knowledge test for aspiring taxi drivers is a VAT-free service. Although the tax office and the court of first instance had ruled otherwise for several reasons, the Supreme Tax Court referred to the overriding EU VAT Directive for its conclusion in the case of dispute.
When using a food-court in a shopping mall the services of a fast-food provider may not be a delivery of food (for which the reduced VAT rate is applicable) but rather a service subject to the standard VAT rate if - as the Supreme Tax Court points out in a most current decision - it is evident from the perspective of an average consumer that the provider of the food has a facility at his disposal on the nearby premises. This, e.g., may be the case if a tray is provided for transporting the purchased food to a consumption facility located in the food-court.
In two decisions, the Supreme Tax Court has defined in more detail the requirements for a foreign permanent establishment in cross-border situations under a double tax treaty (DTT). If such a treaty exists, double taxation is usually avoided by exempting the foreign branch income from German tax.
The Supreme Tax Court has held that minicabs cannot claim the same reduced rate of VAT as taxis, except for ambulance services under a common contract with a health fund.
The Supreme Tax Court reversed three earlier rulings of the Baden-Wuerttemberg Tax Court and decided that Sweden has no right of taxation, even if at the time of the gift the gift tax had been abolished in Sweden (here: as of 1 January 2005). As a result, a gift made by a donor who has his residence both in Germany and Sweden is subject to the provisions of the German Inheritance and Gift Tax Act.
A taxpayer who emigrated to the U.K. and who exercised his right under U.K. tax law to pay tax on income not earned in the U.K. on a "remittance basis" is caught by the preferential taxation regime of Sec. 2 (2) No. 2 Foreign Tax Act and subject to extended limited tax liability in Germany.
In a decision published in April 2025 the Supreme Tax Court held that the effective day on which the actual activities are carried out by a partnership is relevant to determine the begin of its trade tax liability.
As the state of employment, Germany has the right to tax a severance payment to the extent that the employee has exercised the activity in Germany. According to a decision of the Supreme Tax Court in the case of cross-border situations, the exclusion to tax benefits in kind from the exercise of share options and comparable rights under tax treaty law is based pro rata temporis on the place of employment of the employee during the vesting period (defined as the period in which the employee is entitled to acquire the options).
According to a most recent decision of the Supreme Tax Court, the income from employment of a pilot resident in Germany and who is employed in international air traffic by a Swiss-based company is only exempt from German income tax (subject to progression) to the extent that he performs his activity on Swiss soil and in Swiss airspace in accordance with the principle of territoriality.
The Regional Tax Court of Muenster held that a loss from the exchange of profit participation rights for shares in a registered cooperative ("eG") and bonds may be set off against income from capital investments. Thus, the tax office's attempt to regard the loss as belonging to the non-taxable private asset portfolio of the plaintiff failed.
The Federal Cabinet today adopted the Common Action Plan against Organized Crime. It was jointly developed by the Federal Ministry of Finance, the Federal Ministry of the Interior, and the Federal Ministry of Justice and Consumer Protection.
The European Union and Singapore have taken a significant step forward in their bilateral trade relations with the signing of a landmark Digital Trade Agreement. It has been designed to improve consumer protection, facilitate trustworthy cross-border data flows, provide legal certainty for companies wishing to engage in cross-border digital trade, and remove unjustified barriers to digital trade. In its current press release the EU Commission provides further information.
The Supreme Tax Court decided that rental agreements between spouses are not generally considered as “fictitious transactions” even if the rental payments are returned to the business via intra-family money accounts (cycles).
In two decisions, the Düsseldorf Tax Court commented on the profit allocation regarding the operation of a transnational pipeline network between Germany, Belgium and the Netherlands through so-called pipeline operating sites which are permanent establishments from a tax point of view.
In a recently published decision, the Supreme Tax Court commented on the issue of recognizing prior ownership periods in the case of a qualified share exchange during the year with respect to the relief for dividends on qualifying holdings (trade tax intercompany dividend privilege). The court rejected a deduction of the dividend from the trade tax basis because the cut-off date “at the beginning of the period of levy” applicable under Section 9 (2a) TTA was not met since the plaintiff did not yet hold an interest in V GmbH at the beginning of the assessment period.
On Thursday, 26 June 2025, the Bundestag adopted the draft bill for the “Act for an Immediate Tax Investment Programme to Strengthen Germany as a Business Location” as proposed by the coalition parties (21/323).
The Bundestag will vote on the planned reduction in energy taxes on fuels on Thursday 23 April 2026. A special session of the Bundesrat has been convened for 24 April 2026, with the Second Energy Tax Reduction Act as the sole item on the agenda.
Today, the Federal Cabinet approved the draft amendment to the Tax Consultancy Act and other tax regulations. This initiative aims to modernize tax consultancy law and make it more flexible for citizens. The draft also contains amendments to the Real Estate Transfer Tax Act. Another focus is greater tax fairness in the area of trade tax.
In a recent judgment, the Supreme Tax Court decided that the statutory interest levied on late payment or refund of value added tax amounts pursuant to Section 233a of the General Tax Code does not contravene EU law.
