Categories: Supreme Tax Court cases (597 found)

1. 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: Financial Services (FS) / Finanzdienstle ...
2. 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
3. 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 ...
4. 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 ...
5. 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
6. 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
7. 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 ...
8. 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
9. 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 ...
10. 14.10.2024

    German-Swiss double tax treaty: Right for taxation during la ...

    In a most recent judgment, the Supreme Tax Court decided that in a case where an employee working in both Germany and Switzerland until the termination of the employment relationship and thereafter is irrevocably released from his duties with continued payment of his salary, the income from employment pursuant to Art. 15 para. 1 sentence 1 of the double tax agreement between Germany and Switzerland is subject to tax only in Germany as the country of residence.

    Categories: Supreme Tax Court cases

    Keywords: employment income, allocation of taxing ...
11. 14.10.2024

    Waiver of claims between shareholders in connection with cap ...

    Where shareholders of a GmbH agreed that payments to the capital reserve are to be allocated on a shareholder-related basis, but in deviation the capital reserve is instead allocated to all shareholders in connection with a capital increase in accordance with their participation quotas, the waiver of an appropriate value adjustment by the shareholder who made the payments may constitute a free gift in favor of the co-shareholders.

    Categories: Supreme Tax Court cases

    Keywords: free gift, waiver
12. 11.10.2024

    Energy related tax reduction for the renewal of a heating sy ...

    The Supreme Tax Court decided that the tax reduction for energy-related measures, such as the installation of a modern boiler, can only be granted once the installation has been carried out and the invoice amount has been transferred in full to the account of the installation company.

    Categories: Supreme Tax Court cases

    Keywords: Energy, renewable energy
13. 27.09.2024

    Deduction of input VAT upon supply of electricity to tenants

    The supply of electricity to tenants is an independent main service and distinct from the otherwise tax-free rental, and the VAT from the purchase of the photovoltaic systems is deductible for the landlord as input VAT.

    Categories: Supreme Tax Court cases

    Keywords: input tax deduction, ancillary service, ...
14. 24.09.2024

    No retroactive correction of invoices for want of reference ...

    According to the Supreme Tax Court, the subsequent correction of invoices does not have retroactive effect considering the requirements laid down in Section 14a (7) VAT Act regarding the additional obligations on the issue of invoices for intra-Community triangular transactions. This decision is a follow-up on an earlier judgment of the European Court of Justice from 2022 in the case C-247/21 Luxury Trust Automobil.

    Categories: Supreme Tax Court cases

    Keywords: incorrect invoice, alteration of VAT inv ...
15. 23.09.2024

    No further application requirements after option for half-in ...

    Certain type of capital investment income may be taxed under the partial income method (so called half-income method) upon application of the taxpayer and is valid for another 4 years following the year in which the application was made. According to the Supreme Tax Court, the specific preconditions laid down in Section 32d (2) Income Tax Act, e.g. for minimum ownership, only have to be met in the first year of application; a failure to meet the requirements in the following four assessment periods is not harmful.

    Categories: Supreme Tax Court cases

    Keywords: investment income, half-income system
16. 17.09.2024

    Increase in value of GmbH shares as taxable gift

    In a recent judgment the Supreme Tax Court decided that the increase in value of shares in a corporation for the purposes of inheritance and gift tax must be determined in accordance with the rules of Section 11 of the Valuation Act. For this purpose, the market value of the beneficiary's share prior the transfer must be compared with the market value of this share after the contribution.

    Categories: Supreme Tax Court cases

    Keywords: taxable value, inheritance and gift tax, ...
17. 16.09.2024

    Saved expenses deemed to be hidden profit distribution

    The Supreme Tax Court decided that a hidden profit distribution may be assumed if the shareholder saves own expenses. Such cost savings can also be the result of a waiver of an agreement for reimbursement or compensation claims. The tax court of first instance must now determine whether the economic embargo in the customer's home country and the ensuing compensation payments had legal consequences for the GmbH or whether the breach of contract was solely made at the instruction of the parent company.

    Categories: Supreme Tax Court cases

    Keywords: hidden distributions
18. 11.09.2024

    Inheritance tax: Transfer of privileged assets

    In a most recently published decision, the Supreme Tax Court held that the transfer of the tax privilege for business assets, rented residential property and family homes among co-heirs requires that the assets are conveyed in the course of the division of the estate. The transfer would not be privileged if the decision to divide the estate and thereby transfer preferential (business) assets in exchange for non-preferential assets is based on a new decision of the community of heirs, when initially they deliberately left the estate undivided.

    Categories: Supreme Tax Court cases

    Keywords: inheritance tax privilege
19. 05.09.2024

    Update: Taxation of foreign investment funds under the Germa ...

    In a most recent decision, the Supreme Tax Court held that a foreign investment fund who received dividends from domestic stock corporations which were subject to tax withholding (capital gains tax) under the 2004 Investment Tax Act is in general entitled to a refund of this tax under the principles of EU law.

    Categories: Supreme Tax Court cases

    Keywords: foreign investment trust, Investment Tax ...
20. 03.09.2024

    VAT: ECJ referral on margin taxation for travel services

    In a decision of 20 June 2024, the Supreme Tax Court asked the ECJ for a preliminary ruling as to whether the margin taxation for tour operators and travel agents must also be applied in a case of „bus excursions“ organized by a company with the intention of promoting the sale of its goods.

    Categories: Supreme Tax Court cases

    Keywords: margin taxation, travel services
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