Tax & Legal

In a recent judgment, the Supreme Tax Court decided that the sale of educational institutions (training faculties) is not a service directly serving the purpose of schooling and education and is therefore not exempt from trade tax.

A limited liability company (GmbH) that holds training classes at an education institute through its sole shareholder-managing director is not a vocational education organization qualifying for trade tax exemption under Section 3 No. 13 Trade Tax Act.

The tax authorities of the Federal States have issued a joint response to the ECJ’s decision in EV (C-685/16) on 20 September 2018, in which the Court decided that the “activity requirement,” contained in the rule providing for a trade tax exemption on distributions from third countries contravened EU law.

On 20 September 2018, the European Court of Justice held that the “activity clause” in the German trade tax act for third country sourced dividends is contrary to the free movement of capital (Art. 63 of the Treaty on the Functioning of the EU - TFEU).