In two parallel decisions the Supreme Tax Court held that a group of natural persons who are not organized in the legal form of a partnership or another corporation is not considered as a legal entity under civil law and real estate transfer tax law and cannot therefore be a controlling company within the meaning of Section 6a Real Estate Transfer Tax Act which provides tax exemption for transfer or concentration in the hands of a single shareholder of at least 95% of the equity capital of a property-owning company.
The tax exemption from real estate transfer tax (RETT) in the event of restructuring within a group under Section 6a of the RETT Act also applies to cases where a dependent second-tier company is merged with a subsidiary of a group parent company, even if in the five years after the transaction 25 percent of the shares in the parent company are transferred to a new shareholder. In his decision the Supreme Tax Court held that the subsidiary must be regarded as “controlling company” within the meaning of the RETT Act.
The tax exemption from real estate transfer tax (RETT) in the event of restructuring within a group under Section 6a of the Real Estate Transfer Tax Act (RETTA) does not constitute State Aid prohibited by EU law.
