Tax & Legal

In the case of the transfer of assets for partial consideration, the gain is from a private sale and must be allocated into a transaction for consideration and a gratuitous part based on the ratio of the consideration to the market value of the transferred asset. According to the Supreme Tax Court, this also applies if the consideration is below the initial (acquisition) costs.

The finance ministry has decreed that the selling costs of investments leading to a partially taxable gain are to be set against the taxable portion only.

The ECJ has held that if a country excludes capital gains and losses on investments from taxation, the exclusion may also extend to that part of the loss that directly resulted from exchange rate fluctuations.

The ECJ has held the roll-over relief provisions allowing deferral of the tax charge on a capital gain from the sale of business property to infringe the freedom of establishment inasmuch as they require reinvestment of the gain in a replacement asset in Germany.

The Supreme Tax Court has held that the ten-year holding period for exempting a gain on sale of privately held property runs to the date the agreement to sell the property is binding on both parties regardless of any as yet unfulfilled condition subsequent.

The Supreme Tax Court has held that shares sold from a mixed holding should be identified from their serial numbers. GmbH shares sold should be identifiable from the contract.

The Supreme Tax Court has held that the pre-2009 loss on the sale of a bond with a floating interest rate could only be offset against capital gains on the sale of investments in the same or in future years.

The ECJ has upheld a German rule providing for immediate taxation (but with a deferral option) of the capital gain inherent in the excess of the market over the book value of a business transferred to a corporation in exchange for shares where as a result of the transaction Germany would lose the right to tax the gain on any subsequent sale of the shares.

The Supreme Tax Court has held that the sale of a partnership share is subject to trade tax if the tax effective dates of sale and of its acquisition of the business of its GmbH subsidiary through merger are identical.

The Supreme Tax Courts has expressed serious doubts on the definition of a “significant holding” leading to an income tax charge on a gain on sale in 1999 and 2000.

The Supreme Tax Court has dismissed a claim by a retiring partner that his supplementary tonnage tax charge due be privileged as a form of capital gain on disposal of his partnership share.

The Supreme Tax Court has held that the capital gain on the sale of shares is the difference between the historical acquisition cost and the net proceeds received.

The Supreme Tax Court has refused a taxpayer a deduction for a series of short-term losses incurred through speculating in foreign currencies.

The Supreme Tax Court has held that the interest income of a German-owned limited partnership in England is taxable in Germany as interest, and not exempt as trading income. The capital gain on the sale of the property is not exempt as taxable in the UK, merely because of the capital allowance claw-back.

The Supreme Tax Court has held that irrecoverable proceeds from the tax-free sale of shares reduce the tax-free gain and are not a deductible bad debt.

The Supreme Tax Court has held that a concerted sales action by shareholders among themselves to realise losses was not abusive despite unchanged holding ratios.

The Supreme Tax Court has held that a share exchange at nominal value leading to a transfer of hidden reserves abroad triggers a taxable capital gain for the transferring shareholder.