Tax & Legal

Categories: All (4 found)

1. 31.03.2025

   German-French double tax treaty: Taxation of severance payme ...

   As the state of employment, Germany has the right to tax a severance payment to the extent that the employee has exercised the activity in Germany. According to a decision of the Supreme Tax Court in the case of cross-border situations, the exclusion to tax benefits in kind from the exercise of share options and comparable rights under tax treaty law is based pro rata temporis on the place of employment of the employee during the vesting period (defined as the period in which the employee is entitled to acquire the options).

   Categories: Supreme Tax Court cases

   Keywords: stock options, severance payment, income ...
2. 28.10.2024

   Taxation of severance payments for cross-border commuters un ...

   In a recent judgment the Supreme Tax Court decided that - according to Article 13 paragraph 1 of the double tax agreement (DTT) with France - Germany has the right to tax the severance pay as a result of the termination of an employment relationship insofar as the compensation relates to the period during which the employee (who was subject to unlimited tax liability at the time) lived and worked in Germany. The taxable amount must be calculated by considering the duration of the domestic residence compared to the term of the employment. The so-called cross-border commuter rule in Article 13 para. 5 of the DTT does not preclude Germany’s right of taxation.

   Categories: Supreme Tax Court cases

   Keywords: cross-border commuters, severance paymen ...
3. 02.01.2023

   Waiver of head physician’s right for future private liquidat ...

   The Supreme Tax Court decided that the waiver of a head physician of the right to private liquidation in return for monthly compensation payments made by the clinic owner to be able to bill privately insured persons himself is a taxable service and subject to VAT. Moreover, relinquishing the future right for private medical treatment does not fall under the medical services exemption as provided by national law.

   Categories: Supreme Tax Court cases

   Keywords: waiver, medical treatment, severance pay ...
4. 01.08.2021

   Additional severance payment for earlier termination of empl ...

   The mutual termination of an employment is normally (also) in the interest of the employer. A severance payment made in return is therefore generally tax privileged. The Lower (regional) Tax Court of Hesse decided that this also applies in the event of an additional payment because of the (premature) termination of the employment relationship prior to the date as originally set in the termination agreement.

   Categories: Tax Court

   Keywords: compensation payment, tax privilege, sev ...