Tax & Legal

Categories: All (4 found)

1. 18.12.2023

   Excess drawings in a two-tier partnership structure

   In a decision published on 14 December 2023 on Section 4 (4a) of the German Income Tax Act (restriction of deductible interest expense in the case of excess drawings), the Supreme Tax Court decided that the rule whereby Section 4 (4a) Income Tax Act (ITA) is to be applied for each business in isolation – a so-called business-related application - also applies to multi-level partnership structures. As a result, the transfer of a rolled-over profit in accordance with Section 6b ITA (roll-over relief) to another legal entity does not lead to a contribution to the transferring legal entity - (i.e. a contribution which would reduce the level of excess drawings) - due to the fact that no contributable asset was involved.

   Categories: Supreme Tax Court cases

   Keywords: non-deductible expenses, loan interest, ...
2. 18.08.2022

   5%-taxation of cross-border merger gains compatible with EU ...

   The transfer gain following an upstream merger must be added back to taxable income of the parent corporation at 5% as non-deductible operating expenses according to Section 8b (3) Sentence 1 Corporation Tax Act in conjunction with Section 12 (2) Sentences 1 and 2 Reconstructions Tax Act. The Schleswig-Holstein Tax Court held this to be in accordance with the EU Merger Directive.

   Categories: Tax Court

   Keywords: non-deductible expenses, Upstream merger
3. 22.01.2019

   Catering costs on film set not fully deductible as business ...

   Only 70 per cent of the costs incurred by a film production company for meals and drinks distributed free of charge to the persons employed at the film location for the production of the recordings can be deducted as business expenses, provided that the meals and drinks are also distributed to those persons who are not employees of the company itself, but who, for example, participate in the production of the set as employees of the participating television stations.

   Categories: Supreme Tax Court cases

   Keywords: non-deductible expenses, business expens ...
4. 05.01.2011

   Disallowance of 5% of tax-free investment income constitutio ...

   The Constitutional Court has held the blanket disallowance of 5% of dividends and capital gains realised by companies to be constitutionally acceptable.

   Categories: PwC Reports

   Keywords: add-back, Tax-free investment income, bl ...