16.07.2024 Accrual and taxation of unpaid bonus for shareholding managi ... A management bonus for the majority shareholder and managing director of a limited liability company (GmbH) which is not recorded as a liability in the certified annual financial statements is not immediately subject to income tax, even if it is mandatory under generally accepted accounting principles to record a liability to this effect in the (certified) financial accounts. Categories: Supreme Tax Court casesKeywords: management agreement, bonus share
08.07.2024 No access to tax files to check possible claim for damages a ... The access to tax files after the taxation proceedings have been carried out is not permitted if the taxpayer wishes to pursue non-tax-related purposes, such as the examination of a claim for damages against the tax advisor. In its decision the Supreme Tax Court noted that this does not affect the right to information on the processing of personal data in accordance with the General Data Protection Regulation. Categories: Supreme Tax Court casesKeywords: Personal data, Data Protection
05.07.2024 No inheritance and gift tax privilege for parking garage In a recent decision, the Supreme Tax Court held that a multi-storey car park (parking garage) is not eligible for the inheritance tax privilege available for business assets. Categories: Supreme Tax Court casesKeywords: inheritance tax privilege, special busin ...
02.07.2024 RETT: No protection of legitimate expectation in case of ind ... In a most recent decision, the Supreme Tax Court commented on the tax situation of an indirect unification of shares through intermediary partnership in 2012 with respect to the relevant holding for establishing its interest in the related real-estate holding company. The court further held that there is no protection of legitimate expectations with respect to the tax effects of a subsequent judgment of the Supreme Tax Court in 2017. Categories: Supreme Tax Court casesKeywords: share transfer, Protection of legitimate ...
01.07.2024 Constitutionality of the loss set-off restriction for forwar ... In the summary review required during suspension proceedings under Section 69 (3) of the German Tax Court Code, the loss set-off restriction for forward transactions/futures under Section 20 (6) Sentence 5 of the German Income Tax Act (ITA) in the version of the Finance Act 2020 of 21 December 2020 (Federal Law Gazette I 2020, 3096) is incompatible with Article 3 (1) of the German Constitution. This was decided by the Supreme Tax Court in a ruling published on 27 June 2024. Categories: Supreme Tax Court cases, Tax & Legal New ...Keywords: Futures, losses, loss curtailment, Incom ...
28.06.2024 Calculation of tax-free bonus for night shifts The bonus paid to employees for work performed outside regular working hours (here: during the night-shift) that are remunerated separately must be determined based on the salary paid to the employee for regular working hours and not on the remuneration for the night-shift. Categories: Supreme Tax Court casesKeywords: night work, employee taxation
25.06.2024 Update: Flat-rate energy price allowance subject to income t ... According to a recent decision of the Münster Tax Court the energy price allowance paid to employees in 2022 is taxable as income from employment. Section 119 para. 1 sentence 1 Income Tax Act, as contested by the plaintiffs, is not unconstitutional. Categories: Supreme Tax Court casesKeywords: energy tax, income from employment
21.06.2024 Access for taxpayers to personal data information pursuant t ... In a recent decision, the Supreme Tax Court commented for the first time on the requirements and scope of the right to information under the General Data Protection Regulation. Categories: Supreme Tax Court casesKeywords: Data processing, Data Protection
17.06.2024 Trade tax addback of portfolio dividends in 2001 tested befo ... After the European Court of Justice had answered the preliminary request submitted by the Supreme Tax Court on the subject of trade tax addback of foreign portfolio dividends in the year 2001, the latter continued to suspend the appeal and now referred the matter to the Constitutional Court. It should be ascertained whether the transitionary regulation, which had been introduced with the replacement of the imputation system in 2001 with the half-charge to income tax, contravenes the principles of legitimate expectations laid down in Article 20 (3) of the Basic Law. Categories: Supreme Tax Court casesKeywords: trade tax addback
11.06.2024 No application of loss forfeiture rules for losses allocated ... The loss forfeiture rules of Section 8c of the Corporation Tax Act in the version valid for 2014 are not applicable to deductible losses which are allocated to a corporation as partner of a limited partnership pursuant to Section 15a Income Tax Act. With this decision, the Supreme Tax Court contradicts the view of the tax administration. Categories: Supreme Tax Court casesKeywords: partnership income, Loss relief
10.06.2024 No obligation to use the special electronic mailbox for law ... In a recently published decision, the Supreme Tax Court held that a law firm in the legal form of a limited liability company (GmbH) acting as representative of the claimant was not obliged to use the mandatory electronic legal communication system when submitting an appeal to the tax authorities before 1 August 2022. Categories: Supreme Tax Court casesKeywords: telecommunications, electronic data
31.05.2024 Amount of tax-free allowance on transfer of assets to family ... In a most recent decision, the Supreme Tax Court held that great-grandchildren could also be potential beneficiaries of assets transferred to a family foundation for inheritance and gift tax purposes. They would be the „most distant beneficiary“ according to Section 15 para. 2 of the Inheritance and Gift Tax Act even if they have not yet been born at the time the foundation is established. Categories: Supreme Tax Court casesKeywords: inheritance and gift tax, family foundat ...
27.05.2024 UPDATE: Dual residence does not exclude German gift tax liab ... The Supreme Tax Court reversed three earlier rulings of the Baden-Wuerttemberg Tax Court and decided that Sweden has no right of taxation, even if at the time of the gift the gift tax had been abolished in Sweden (here: as of 1 January 2005). As a result, a gift made by a donor who has his residence both in Germany and Sweden is subject to the provisions of the German Inheritance and Gift Tax Act. Categories: Supreme Tax Court casesKeywords: gift tax, dual residence
15.05.2024 Notification of an appeal decision to representative valid d ... In a most recent judgment, the Supreme Tax Court decided that an administrative act (here: the appeal decision of the tax office) is also effectively and validly delivered if it is sent to an authorized representative who was originally appointed but whose power of attorney had been revoked in the meantime, a fact which only became known to the tax office until after the appeal decision was dispatched. Categories: Supreme Tax Court casesKeywords: delivery documentation
08.05.2024 Income tax reduction due to inheritance tax charge only with ... According to a decision of the Supreme Tax Court, the 5-year preferential period in Section 35b sentence 1 of the German Income Tax Act starts at the time the inheritance tax arises, which is generally upon the death of the testator. This also applies if it was not possible to claim the tax reduction in due time by reasons for which the taxpayer could not be held responsible. Categories: Supreme Tax Court casesKeywords: inheritance tax, preferential taxation
29.04.2024 Two-step trade tax allocation if permanent establishment is ... The trade tax allocation of permanent establishments extending over more than one municipality ("multi-municipality permanent establishments") must by way of typification consider the specific character and nature of the permanent establishment and the interests of the municipalities involved. The Supreme Tax Court held that, in the case of permanent establishments constituted through a natural gas pipeline, the volume of natural gas supplied in the respective communities can be a suitable approach for allocation of the trade tax. Categories: Supreme Tax Court casesKeywords: trade tax charge
16.04.2024 Estimate of taxable income if deficient cash register is use ... In a recent ruling the Supreme Tax Court continued to develop its case law on the application of the principles of proportionality and protection of legitimate expectations in the case of estimates by the tax authorities. A full estimate that completely ignores the taxpayer's own profit and loss calculation is only permissible if the deficiencies identified are serious. Categories: Supreme Tax Court casesKeywords: electronic cash register, minimum taxabl ...
16.04.2024 External tax audit to include review of tax withholding for ... The competence of the Federal Central Tax Office is for both full assessment of German income tax of limited taxpayers as well as monitoring and carrying out the withholding tax procedure in accordance with Section 50a (1) Income Tax Act. In a most recently published case, though, the Supreme Tax Court held that it is not permissible for the Central Tax Office to conduct general external tax audits. This is solely the responsibly of the local tax offices. Categories: Supreme Tax Court casesKeywords: tax at source, tax audit
11.04.2024 Advocate General: Infringement of data protection rights of ... In a preliminary request from the Administrative Court Wiesbaden (Germany) the Advocate General (AG) is of the opinion that the supervisory authority has an obligation to act when it finds a breach while investigating a complaint. However, the decision as to what corrective action to take depends on the specific circumstances of each individual case. Categories: Supreme Tax Court casesKeywords: Data Protection
10.04.2024 Contribution for general partner not part of trading profit ... In a most recent decision, the Supreme Tax Court held that profits from special compensation for the general partner of a limited partnership pursuant to Section 5a (4a) sentence 3 Income Tax Act attributable to the period following the cessation of the commercial and promotional activity of a partnership are not part of the trading profit subject to trade tax. Categories: Supreme Tax Court casesKeywords: Limited Liability Company, compensation ...
