Tax & Legal

In two similar decisions the Supreme Tax Court held that amounts charged for subsequent special requests for a property yet to be built are subject to real estate transfer tax if there is a legal relationship to the original property purchase agreement. These costs are then assessed in a subsequent separate tax notice. However, this does not apply to house connection costs if the property buyer has already agreed to assume these costs in the (original) property purchase agreement.

The Constitutional Court has held the set calculation of the value of the land held by a company when assessing the transfer of the company’s shares to real estate transfer tax to be unconstitutional. The government has been given until June 30, 2016 to enact a different formula, to be applied retroactively to January 1, 2009.

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 laid a second case before the ECJ on the division of input tax incurred in the construction and operation of a dual-use building between taxable and exempt activity.

The Supreme Tax Court has accepted the sale of mining rights attaching to a property no longer owned by the seller as the sale of a real estate right to be taxed as a capital gain.

The ECJ has held that a Spanish transfer tax on the purchase of shares in a property-owning company is not similar to VAT and is therefore not precluded by the tax duplication prohibition of the Sixth Directive.

The finance ministry has issued a decree on the place of performance of the services supplied to, in particular, offshore wind farms.

The finance ministry has amended its VAT Implementation Decree to follow an ECJ ruling that a permanently moored houseboat is to be let as a property.

The ECJ has held that a non-resident with German property income must be entitled to deduct the cost of an annuity if the annuity would not have been paid without the acquisition of the property.

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.