In a recently published judgment, the Supreme Tax Court reaffirmed its strict position that, in the case of a direct change in shareholders, it is irrelevant whether the new shareholder under civil law (in this case: the trustor) previously held an indirect interest in the partnership.
The value for gift tax of a limited partnership share which is gratuitously transferred to a related party may be calculated by using the capitalized earnings value method in order to determine the "sustainably achievable annual yield" and to correct one-time expenses. In these circumstances, the expense of a fine imposed for an antitrust violation must be added back to the relevant baseline profit, the Supreme Tax Court said in a most recently published decision.
The Supreme Tax Court decided that a simply signed legal statement prepared by an attorney does not meet the requirements for electronic legal communications under the Code of Procedure of Fiscal Courts unless it is transmitted to the court via a designated transmission channel specified therein. In the event the deadline for filing a lawsuit has been missed, reinstatement into the status quo ante may be granted regardless of the plaintiffs‘ fault if the court itself violated its duty of care.
In a recent judgment, the Supreme Tax Court decided that a complaint filed by a tax advisor in an incorrect file format is still valid if the case files at the tax court are still maintained in paper form and the complaint is printed out and added to the file there.
In a recent judgment, the Supreme Tax Court decided that the comparative prices for real estate determined by expert committees are, in principle, binding and must therefore be used by the tax authorities and taxpayers when valuing real estate for inheritance and gift tax purposes.
If a taxpayer who has incurred expenses for the maintenance of a historic building used as his or her primary residence dies before the end of the ten-year deduction period, the right to claim the deduction generally does not pass to the heir. With its most recently published decision the Supreme Tax Court confirmed its earlier case law in similar situations.
The Supreme Tax Court decided that so-called “consolidation gain” from the settlement of liabilities and receivables following a universal transfer of assets from a French Société à Responsabilité Limitée (SARL) to its sole shareholder GmbH cannot be neutralized off-balance-sheet in analogy to Section 8b (3) Sentence 8 of the Corporation Tax Act.
In a recent decision, the Supreme Tax Court stated that, for reasons of equity, a different assessment of inheritance tax is possible in the absence of enrichment, provided it is established that the recipient was not otherwise enriched because he or she was entitled to claims for restitution or compensation for lost value.
In its judgment of 9 April 2026 – VI R 1/24, the Supreme Tax Court ruled that, under the Agreement for the Avoidance of Double Taxation concluded between the Republic of Cyprus and the Federal Republic of Germany (Cyprus DTA 2011), Germany had, as the state of residence, the right to tax the employment income of a German resident employee, who was working on board a vessel engaged in domestic maritime transport. Furthermore, it clarified that a ‘vessel engaged in inland waterway transport’ within the meaning of the Cyprus DTA 2011 is only one that operates exclusively on inland waterways situated within the mainland.
In a case concerning VAT for services supplied electronically by a German GmbH through an app store operated by an Irish company, the Supreme Tax Court held that the place of supply of such services to the customers (non-taxable persons) was in Ireland and - pending further facts still to be ascertained by the lower tax court in a second hearing - no German VAT arises.
In a most recently published decision, the Supreme Tax Court commented on Section 8b (3) Corporation Tax Act which deals with a prohibition on deductions (such as the write-off in case of impairment of loans) in case of tax-exempt dividend income received by a corporation from shares held in another company. In addition, the court held that the disallowance is not applicable where a natural person is a related party to the company.
In a most recently published decision, the Supreme Tax Court held that the interest rate of 5.5% applicable under Section 14(1) Sentence 3 of the Valuation Act (regarding lifetime usufructs and annuities) does not violate the principle of equality of Article 3(1) Basic Law when used to value a monthly lifetime annuity of the beneficiary for gift tax purposes.
As a rule, parties to a legal proceeding are not entitled to compensation for the excessive length of a fiscal court trial if the parties have agreed to adjourn the court proceedings in light of an appeal already pending before the Supreme Tax Court in a similar case.
In a most recently published decision, the Supreme Tax Court held that a disability compensation received by a former member of the U.S. Armed Forces for an injury suffered in the line of duty is tax-exempt under Section 3 No. 6 Income Tax Act.
Shareholders of a U.S.-based S corporation are eligible for a full refund of the withholding tax on dividends paid by a German-based subsidiary. This was decided by the Supreme Tax Court in a recently published judgment.
The gratuitous transfer of a life insurance policy (transfer of contract) is subject to gift tax at the time of the transfer and must be assessed for tax at its surrender value. Any usufruct retained by the donor does not take effect before the life insurance policy is terminated.
Whether a payment made in connection with the sale of a share in a corporation for the selling shareholder’s continued service as managing director is classified as capital gain under Section 17 Income Tax Act or as income from employment shall be determined based on the economic context and motivation, the Supreme Tax Court said in a most recently published decision.
Costs for legal advice and representation in connection with a partition auction for dissolution of a community of heirs are deductible from the total value of the estate. According to the Supreme Tax Court, this also applies if the community of heirs had already assumed management of the estate’s assets prior to a request for distribution by one of the co-heirs.
In a recent decision concerning the deductibility of expenses for a home office used by a self-employed taxpayer, the Supreme Tax Court clarified the requirements for keeping records of such expenses in terms of content and time. These requirements must be met. Failure to comply generally results in the non-deductibility of the expenses.
With regard to the refund of withholding tax on profit distributions made by a domestic subsidiary to its EU parent company, the Supreme Tax Court decided that these distributions are not excluded from the tax relief under the EU Parent-Subsidiary Directive if they relate to profits that, although distributed after the commencement of the subsidiary’s liquidation, were generated prior to the opening of the liquidation proceedings.
