03.01.2025 MoF: Revised allocation formula for input VAT deduction of f ... Towards the end of 2024 the Federal Ministry of Finance (MoF) commented in some detail on the input VAT deduction for credit institutions. The ministerial pronouncement focuses on the attribution of input transactions to output transactions and the relevant input VAT allocation in accordance with Section 15 (4) VAT Act. Another focus of the MoF circular is on cross-border structures and specifically the services between local branches and their foreign head office and vice versa. Categories: Official PronouncementsKeywords: banking service, input VAT deduction
26.11.2024 Introduction of compulsory e-invoicing in Germany – final Mo ... The Growth Opportunities Act of 27 March 2024 introduced a binding standard for electronic invoices (e-invoice) from 2025, which applies to all supplies of goods and services performed between taxable persons (B2B) established in Germany. Staggered transition periods will apply for issuing e-invoices, but accepting such invoices in the prescribed format will be mandatory from 1 January 2025. Now the Federal Ministry of Finance (MoF) has published a final decree on this matter. Categories: Official PronouncementsKeywords: electronic invoice
25.11.2024 MoF draft: Questions regarding the income tax treatment of f ... On 15 November 2024 the Federal Ministry of Finance (MoF) has published the draft of an explanatory circular on various issues relating to the tax treatment of fund establishment costs and has sent a corresponding draft circular to certain associations to comment by 12 December 2024. Categories: Official PronouncementsKeywords: investment funds, acquisition
22.11.2024 Bundesrat approves the Finance Act 2024 and a retroactive in ... The Bundesrat approved both the Finance Act 2024 and the Act for the Tax Exemption on the Subsistence Minimum 2024 at its session on 22 November 2024. Categories: Official Pronouncements, LegislationKeywords: Income Tax Act, Finance Act
13.11.2024 MoF: Wage tax treatment of employer‘s expenses for employees ... In a recent circular, the Federal Ministry of Finance (MoF) comments on the question of how expenses for safety measures borne or reimbursed by the employer for employees who are exposed to a specific risk due to their professional position are to be treated for wage tax purposes. The detailed circular was issued with reference to the outcome of discussions with the highest tax authorities of the German Federal States. Categories: Official PronouncementsKeywords: wage tax
08.11.2024 MoF: Applicable wage tax table for temporary employment in G ... On 8 October 2024, the Federal Ministry of Finance (MoF) published a new letter on the determination of tax-free and taxable wages in accordance with double taxation agreements and the foreign activity decree in the wage tax deduction procedure. This current letter replaces the previous MoF letter dated 14 March 2017 and is to be applied for all wage payment periods after 31 December 2024. Categories: Official PronouncementsKeywords: wage tax
25.10.2024 Bundestag adopts Finance Act 2024 Following the recommendation of its Finance Committee, the Bundestag adopted the Finance Act 2024 (FA 2024) in an amended version on 18 October 2024. Categories: Official Pronouncements, LegislationKeywords: RETT, General Tax Code, Income Tax Act, ...
23.10.2024 MoF: Premature termination of a service contract in the tele ... In a recent circular, the Federal Ministry of Finance /MoF) commented on the VAT treatment of compensation payments in the event of a premature termination of telecommunication contracts with a minimum commitment term. Categories: Official PronouncementsKeywords: compensation payment, telecommunications
16.10.2024 MoF: Credit of foreign corporate tax under previous imputati ... In a most recent circular the Federal Ministry of Finance commented on the method of the foreign corporation tax credit under the formerly applicable German imputation system. The focus of the circular are two judgments of the European Court of Justice as regards the calculation and verification of the creditable corporation tax underlying a dividend from another EU country. Categories: Official PronouncementsKeywords: foreign tax credit, corporate income tax ...
11.10.2024 MoF publishes draft of a revised circular on the interest li ... On 10 October 2024 the Federal Ministry of Finance (MoF) published a first draft of a revised BMF circular on the interest limitation provisons in Section 4a Income Tax Act (ITA) and Section 8a Corporate Tax Act (CTA). Due to various amendments which took place in the course of the Act to Promote the Secondary Credit Market (Kreditzweitmarktförderungsgesetz) the tax administration sees the need for revisions. Categories: Official PronouncementsKeywords: interest limitation
09.09.2024 Ministry of Finance: Tax treatment of incongruent distributi ... Following a judgment of the Supreme Tax Court, the tax authorities confirm that incongruent profit distributions - i.e. profit distributions that deviate from the share in the share capital or nominal capital - are in principle to be recognized for tax purposes. This requires that the corresponding dividend resolution is effective under civil law. In its current circular the Federal Ministry of Finance (MoF) explains in more detail the principles and special features of various constellations. Categories: Official PronouncementsKeywords: incongruent advance distribution
03.09.2024 Simultaneous payment of managing director's salary and regul ... The Federal Ministry of Finance has published a circular with comments on the consequences of a Supreme Tax Court decision from 2023 on hidden distributions and has in one part adjusted its earlier circular from 2017 regarding the tax accounting of pension commitments. Categories: Official PronouncementsKeywords: pensions, hidden distributions
18.06.2024 Federal Ministry of Finance: Draft circular on mandatory ele ... On 14 June 2024, the Federal Ministry of Finance (MoF) published a draft circular on the introduction of mandatory electronic invoicing for transactions between domestic businesses from 1 January 2025. Categories: Official PronouncementsKeywords: electronic invoice
14.06.2024 Federal Ministry of Finance circular on VAT taxation of publ ... In a detailed circular dated 12 June 2024, the Federal Ministry of Finance has commented on the input tax deduction by legal entities under public law operating as businesses. Categories: Official Pronouncements, Tax & Legal New ...Keywords: VAT Act
07.06.2024 Federal Cabinet approves government draft of the Finance Act ... At its meeting on 5 June 2024, the Federal Cabinet adopted a government draft for the Finance Act 2024 (FA 2024). Despite numerous revisions, the material amendments from the original draft from 8 May 2024 have been limited. The main changes are shown in italics and red in the following summary of the government draft in italics and red. Categories: Official Pronouncements, Tax & Legal New ...Keywords: Real Estate, trade tax, General Tax Code ...
05.06.2024 Update: Federal Ministry of Finance publishes draft bill for ... On 17 May 2024, the Federal Ministry of Finance (MoF) sent a draft bill for the Finance Act 2024 (FA 2024) to the professional associations for comments by 24 May 2024. The draft has now also been published on the MoF website. The law is intended to implement changes to various areas of German tax law which need adjustment. The focus is on adjustments required by EU law and case law of the European Court of Justice (ECJ), the German Federal Constitutional Court, and the German Supreme Tax Court. Furthermore, follow-up amendments to previous legislative changes will be made. This blog summarises the key content. - Meanwhile the Federal Cabinet has approved the draft bill (see Update further below at the end of this post). Categories: Official Pronouncements, LegislationKeywords: real estate transfer tax, trade tax, Reo ...
22.03.2024 Bundesrat approves the Mediation Committee compromise on the ... On 22 March 2022, after tough negotiations, the Bundesrat (Federal Council) approved the compromise reached by the Mediation Committee on the text of the Act to Strengthen Growth Opportunities, Investment and Innovation as well as Tax Simplification and Fairness (Growth Opportunities Act). Categories: Official Pronouncements, Tax & Legal New ...Keywords: trade tax, Income Tax Act, Growth Opport ...
27.02.2024 Growth Opportunities Act: Dispute to continue despite compro ... In its session of 21 February 2024, the Mediation Committee of the Bundestag and Bundesrat concluded its negotiations in relation to the Act to Strengthen Growth Opportunities, Investment, and Innovation as well as Tax Simplification and Fairness Categories: Official Pronouncements, Tax & Legal New ...Keywords: Corporation tax, trade tax, Income Tax A ...
16.02.2024 Federal States Supreme Tax Authorities Identical Decrees: Ap ... In identical decrees issued by the Supreme Tax Authorities of the Federal States, the tax authorities comment upon the judgment of the Supreme Tax Court of 26 July 2022 (II R 25/20) and upon the underlying view that the option relief under Section 13a (10) Inheritance Tax and Gift Tax Act (or Section 13a (8) IHTA old version) can be exercised separately for each economic unit transferred. This applies to all open cases. Categories: Official PronouncementsKeywords: family business, inheritance and gift ta ...
15.12.2023 Bundesrat approves a partial implementation of the Growth Op ... On 15 December 2023, the Bundesrat approved the partial implementation of the contents of the Growth Opportunities Act in the Act to Promote the Secondary Credit Market. This includes changes to the interest limitation rule and adjustments resulting from the introduction of the Act for the Modernisation of Partnerships. Categories: Official Pronouncements, LegislationKeywords: real estate transfer tax, thin capitalis ...
