Tax & Legal

The Supreme Tax Court decided that expenses for a gym membership are generally not tax deductible as personal extraordinary and inevitable expenses. This also applies if the participation in a medically prescribed functional training program requires a membership in the gym.

The ECJ held that the German inheritance and gift tax option for taxation as a resident does not fully resolve the conflict with EU law from the lower personal allowances for non-residents. In consequence and considering an earlier ECJ judgment of April, 2010 the referring Lower Tax Court now finally ruled in favour of the taxpayer.

The ECJ has held that the principle of freedom of capital movement precludes the German system of granting higher personal allowances on capital transfers where at least one of the parties is resident.

The finance ministry has decreed that all assessments in which the foreign tax credit is less than that actually borne are to be issued provisionally pending a change in the law to reflect personal allowances in the calculation. Taxpayers may apply for a stay of execution on any amount at issue.

An ECJ advocate general has suggested the court extend its earlier rulings against lower personal allowances to heirs in other member states to residents in third countries.