Categories: Supreme Tax Court cases (608 found)

1. 24.12.2024

   Trade tax add-back of advertising expenses

   In a most recent decision, the Supreme Tax Court held that the rental of advertising mediums paid by a service company might be added back for trade tax purposes provided the assets were to be fixed assets had the company itself been the owner.

   Categories: Supreme Tax Court cases

   Keywords: trade tax addback
2. 16.12.2024

   Changes of shareholders in a property-owning partnership

   When determining whether a corporation with a direct interest in the partnership owning real estate is considered a new shareholder within the meaning of Section 1 (2a) sentence 4 of the Real Estate Transfer Tax Act because at least 90% of the shares are transferred to new shareholders, only the shareholding in the corporation must be taken into account. In a most current judgment, the Supreme Tax Court held that a previous participation of the new shareholder of the corporation in the partnership owning the real estate is irrelevant in this respect.

   Categories: Supreme Tax Court cases

   Keywords: limited partnership, real property
3. 09.12.2024

   No VAT free sale of entire business if continued for the ben ...

   The proceeds from the sale of a self-contained business are not subject to VAT provided the sale includes all assets necessary for the purchaser to continue the operation. In a most recent decision, the Supreme Tax Court held that this only applies to services provided between the transferor and the transferee and does not include transactions that are supplied to third parties.

   Categories: Supreme Tax Court cases

   Keywords: VAT-free, sale of business
4. 09.12.2024

   No disallowance of partial write-down in Section 8b (6) sent ...

   In a recent judgment, the Supreme Tax Court held that Section 8b (6) sentence 2 of the German Corporation Tax Act as part of the tax exemption rules for dividends from participations in corporations and associations does not apply to savings banks that are organized as legal entity governed by private law.

   Categories: Supreme Tax Court cases

   Keywords: dividend exemption, investment write-dow ...
5. 03.12.2024

   No right to estimate the withdrawal of non-food items by ret ...

   An additional estimate by the tax office because of a breach of record-keeping obligations is not possible if the taxpayer (a sole trader in the food and non-food sector) was relying on the simplified record-keeping procedure granted to him by the Federal Ministry of Finance. The main issue in the case of dispute was whether the ministerial circular to that effect covers not only food but also non-food items.

   Categories: Supreme Tax Court cases

   Keywords: records, bookkeeping
6. 02.12.2024

   Taxation of benefits from a Swiss family foundation

   The Supreme Tax Court decided that the one-time cash payment and distribution of shares to the plaintiff from a Swiss-based foundation in 2017 (year in dispute) was subject to German income tax as income from capital investment pursuant to Section 20 (1) no. 9 of the German Income Tax Act. In its decision the court explained under which circumstances the income from such a benefit is economically comparable to a regular profit distribution.

   Categories: Supreme Tax Court cases

   Keywords: distribution, foreign foundation
7. 02.12.2024

   Calculation of gift tax for low-interest loans

   In a recent judgment the Supreme Tax Court held that the granting of a loan at an interest rate which is not customary in the market is subject to gift tax as gratuitous contribution. When calculating the interest advantage the standard (typically used) interest rate of 5.5% as mentioned in Section 15 (1) of the Valuation Act cannot be applied if a lower market value for comparable loans has been established.

   Categories: Supreme Tax Court cases

   Keywords: loan interest, low interest
8. 02.12.2024

   No income tax on redemption of a right to usufruct in GmbH s ...

   In a most recent decision, the Supreme Tax Court held that the termination of the right to usufruct is a non-taxable transaction if the holder of the right to usufruct over shares in a private limited company (GmbH) is not also the economic owner of the shares in the GmbH.

   Categories: Supreme Tax Court cases

   Keywords: share transfer, economic ownership
9. 02.12.2024

   No tax privileges for fundamentalist and extremist corporati ...

   In two recent decisions published on 28 November 2024, the Supreme Tax Court commented on the tax privileged non-profit status (public-benefit purpose) of extremist corporations and the presumption of conformity resulting from a Federation’s or a Land’s report on the protection of the constitution according to Sections 51 (3) sentence 2 of the German Fiscal Code.

   Categories: Supreme Tax Court cases

   Keywords: tax privilege, non-profit associations, ...
10. 25.11.2024

    Restrictions for amendment of tax assessment under Section 5 ...

    The correction of a final tax assessment notice pursuant to Section 50d (8) sentence 2 of the German Income Tax Act is only possible if – contrary to the provision in the double tax treaty - the employment income of an unlimited taxpayer has been wrongly included in the income tax assessment by omitting to produce proper documentation as required in Section 50d (8) Income Tax Act. It follows from this decision of the Supreme Tax Court that the possibilities of amending tax assessment under Section 50d (8) sentence 2 Income Tax Act are strictly limited and only apply in exceptional cases.

    Categories: Supreme Tax Court cases

    Keywords: documentation, correction of assessments
11. 25.11.2024

    Requirements for combining business operations of public bod ...

    On 21 November 2024, the Supreme Tax Court has published its decision on the requirements for the combination of business operations of public bodies in accordance with Section 4 (6) sentence 1 Corporation Tax Act which restricts the scope of application for grouping several commercial institutions. The judgment expressly contradicts the more generous view of the tax authorities on this subject as set out in the circular of the Federal Ministry of Finance (MoF) of 12 November 2009.

    Categories: Supreme Tax Court cases

    Keywords: Public Sector Entity (PSE), business fac ...
12. 20.11.2024

    Family foundation as financial institution as defined in Sec ...

    In a most recent decision, the Supreme Tax Court held that the legal form of an institution is not relevant for the qualification as financial company within the meaning of Section 8b (7) sentence 2 of the Corporation Tax Act to be read in connection with Section 1 (3) of the German Banking Act. Therefore, a family foundation under private law can also be considered as finance institution if they are primarily engaged in financial activities.

    Categories: Supreme Tax Court cases

    Keywords: family foundation
13. 19.11.2024

    Inheritance tax: Tax-free amount in case of parent deemed de ...

    German Civil Code in Section 2346 provides for a fiction of pre-death inasmuch as the person renouncing is excluded from intestate succession as though he or she had no longer been alive at the time of the devolution of the inheritance. The grandson of the deceased (the plaintiff) who had invoked this provision claimed the higher tax-free amount of €400,000 upon the inheritance. To no avail, as the Supreme Tax Court held in a most recent decision.

    Categories: Supreme Tax Court cases

    Keywords: inheritance tax allowance
14. 19.11.2024

    Funeral costs paid under a death insurance policy as deducti ...

    If the testator has assigned benefits from a death benefit insurance policy to a funeral home during his lifetime the estate is increased by the heirs' claim for a benefit in kind towards the funeral home. The costs of the funeral are fully deductible as liability of the estate.

    Categories: Supreme Tax Court cases

    Keywords: insurance cover, limited inheritance tax ...
15. 17.11.2024

    Application for transfer at book value to be made also in a ...

    In a most recent judgment, the Supreme Tax Court held that the application for maintaining the book values in accordance with Section 3 (2) sentence 1 of the German Reorganization Tax Act can be made in the notarial deed on the reorganization of which the notary sends a certified copy to the responsible tax office in accordance with § 54 para. 1 of the Income Tax Implementation Ordinance.

    Categories: Supreme Tax Court cases

    Keywords: Tax Book Values, restructuring, transfer ...
16. 11.11.2024

    Trade tax deduction of foreign branch income and profit allo ...

    The Supreme Tax Court had to decide on the profit allocation between Germany and the Netherlands in the case of construction sites. Among other things, the court held that the portion of the trading income which is attributable to the foreign permanent establishment (as not having been earned in Germany) must be eliminated from the trade tax basis according to Section 9 No. 3 Trade Tax Act even if Germany would not be prevented from taxing the entire trading income under the relevant double tax treaty.

    Categories: Supreme Tax Court cases

    Keywords: Foreign branch, trade tax deduction
17. 08.11.2024

    Heat supplies free of charge for business purposes subject t ...

    In a most recent decision, the Supreme Tax Court held that the heat which is supplied free of charge to other entrepreneurs for their business is a supply of goods for consideration for which VAT must be accounted. This also applies in situations where the heat supplied is used by the recipient for transactions that entitle to an input VAT deduction.

    Categories: Supreme Tax Court cases

    Keywords: consideration in kind, heat supplies
18. 28.10.2024

    Taxation of severance payments for cross-border commuters un ...

    In a recent judgment the Supreme Tax Court decided that - according to Article 13 paragraph 1 of the double tax agreement (DTT) with France - Germany has the right to tax the severance pay as a result of the termination of an employment relationship insofar as the compensation relates to the period during which the employee (who was subject to unlimited tax liability at the time) lived and worked in Germany. The taxable amount must be calculated by considering the duration of the domestic residence compared to the term of the employment. The so-called cross-border commuter rule in Article 13 para. 5 of the DTT does not preclude Germany’s right of taxation.

    Categories: Supreme Tax Court cases

    Keywords: cross-border commuters, severance paymen ...
19. 25.10.2024

    Presentation of documents to the tax authorities to comply w ...

    According to a decision of the Supreme Tax Court, the tax office's request for rental agreements from the landlord in accordance with Section 97 Fiscal Code must comply with the guidelines laid down in the General Data Protection Regulation (GDPR). In its judgment. the Supreme Tax Court held in favor of the tax office and that the plaintiff is obliged to produce the relevant documents.

    Categories: Supreme Tax Court cases

    Keywords: Data processing
20. 21.10.2024

    No tax exemption of foreign branch income in case of treaty ...

    The Supreme Tax Court decided that the “switch-over" provision in the respective tax treaties with Russia and Romania, which changes the exemption method to the credit method, was to be applied by observing the activity requirements set in Section 8 (1) of the German Foreign Tax Act.

    Categories: Supreme Tax Court cases

    Keywords: foreign tax credit, switch over provisio ...
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