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 Supreme Tax Court has commented on the requirements for an item of daily use and decided that the profit/loss from the sale of high-priced everyday items is not taxable as capital gain from "private disposals" (Section 23 (1) No. 2 Sentence 2 Income Tax Act).
In a judgment published today the Supreme Tax Court clarified that companies can cover the costs of farewell parties for departing employees without incurring tax disadvantages as long as the event is organized as a company event.
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.
In the case of the partial transfer of individual business assets pursuant to Section 6 (5) Sentence 3 No. 2 Income Tax Act, the taxable profit is not to be determined by adhering to the so-called strict separation theory but rather according to the modified separation theory with proportional allocation of the book value up to the amount of the partial consideration. This was decided by the Supreme Tax Court in a most recently published judgment.
In a recently published decision, the Supreme Tax Court has, in some aspects, facilitated the tax recognition of employee-financed pension commitments for shareholder managing directors of a limited liability company (GmbH) but at the same time it also set some limits.
When testing the arm's length nature of the interest rate on a direct pension commitment financed through deferred compensation in favor of a shareholder-employee, the interest rate agreed for the similar pension promise in favor of an employee who is not a shareholder and who is employed in the same company is not a suitable yardstick, the Supreme Tax Court said in a most recently published decision.
In a most recent judgment following a Polish request for a preliminary ruling, the General Court of the EU confirmed the incompatibility of the local input VAT regulations with EU Law and held that the right to deduct input VAT arises with the supply and the chargeability of the tax, and must not depend on the immediate possession of an invoice provided that the taxable person did receive the invoice before submitting the VAT return. Any national “forced deferral” violates the principle of fiscal neutrality.
The Düsseldorf Tax Court has decided that a so-called bond stripping model involving a partnership limited by shares (KGaA) as a shareholder in a Luxembourg Société d’Investissement à Capital Variable (SICAV) constitutes an abuse of legal form under Section 42 of the German General Tax Code (Abgabenordnung). Does this really mark the end of the legal proceedings that have been ongoing since 2018?
In a most recent judgment, the Supreme Tax Court decided that the obligation to use the special electronic mailbox also applies if a tax advisor who exercises his right to represent himself or represents a relative files a lawsuit before a tax court as a private individual without referring to his accreditation as a tax advisor.
In a most recently published decision, the Supreme Tax Court held that real estate transfer tax falls due on the acquisition by a company of its own shares if this led to a holding of a little over 95% (90%) of the issued share capital in the hands of one of the shareholders.
If a notary fails to comply with his obligation to notify the tax office of legal transactions with relevance to real estate transfer tax within the two-week period as provided for by law he cannot apply for reinstatement into the status quo ante pursuant to Section 110 of the German Tax Code (AO) with respect to the missed notification deadline. This was decided by the Supreme Tax Court in three recently published judgments.
In its ruling of 24 September 2024, the Brandenburg Higher Regional Court clarified that a managing director is in breach of his duty if he withdraws assets from the company for his own benefit and to the detriment of the company. The withdrawal of company assets without compensation by the managing director, who was also a shareholder, also constituted an existence-threatening intervention and led to liability under Section 826 of the German Civil Code (BGB).
Following recent consultations at EU level, new ETACA pilot procedures (European Trust and Cooperation Approach) are now expected to begin in April 2026, the Federal Central Tax Office announced. Companies interested in participating can therefore register until the end of March 2026.
Interest on trade tax refunds pursuant to Section 233a of the General Tax Code (AO) must be recorded as business income when determining taxable income. In a most recently published decision the Supreme Tax Court further stated that the treatment of interest that is not deductible (i. e. added back to income) as interest on arrears pursuant to Section 4 (5b) Income Tax Act versus interest refunds which are subject to income tax does not violate the principle of equality under the Basic Law.
The coronavirus emergency aid (with financial support from the federal government) for the months of April, May, and June 2020 is taxable as business income. According to the decision of the Supreme Tax Court, the original approval notice cannot be amended with retroactive effect if the subsidy had to be repaid later.
The Berlin-Brandenburg Tax Court decided that the relevant double tax agreement with the US requires US withholding tax on dividends to be credited against German trade tax even though the Trade Tax Act does not contain any provisions equivalent to the tax credit rules for corporation tax. It is interesting to note that the Hesse Tax Court had already decided likewise in a decision from February 2021.
If the seller of a property has granted a third party a right of usufruct prior to the conclusion of the purchase agreement, and this right has not yet been entered in the land register at the time of conclusion of the agreement, the transaction is subject to real estate transfer tax. This was decided by the Supreme Tax Court in a most recently published judgment.
In a request for a preliminary ruling from the Düsseldorf Tax Court, the European Court of Justice dealt with the interpretation of Article 3i of Regulation (EU) No. 833/2014 on the import ban on certain goods from Russia listed in Annex XXI. Specifically, the case concerns the seizure by the main customs office of a used vehicle purchased in Russia and then imported into Germany.
The Administrative Court Regulations are to be fundamentally revised. This should reduce the workload on administrative courts and speed up court proceedings. The Federal Ministry of Justice and Consumer Protection has published the first draft to this effect which was sent to the relevant associations for comment.
