The application pursuant to Section 21 (2) Sentence 3 of the Reorganization Tax Act to use the book value (acquisition cost) or an intermediate value as the sale price of the shares in the case of an exchange of shares does not require any specific formal requirement. It can also be made expressly or implied.
In a most recent judgment, the Supreme Tax Court held that the application for maintaining the book values in accordance with Section 3 (2) sentence 1 of the German Reorganization Tax Act can be made in the notarial deed on the reorganization of which the notary sends a certified copy to the responsible tax office in accordance with § 54 para. 1 of the Income Tax Implementation Ordinance.
According to a decision of the Supreme Tax Court, where, within the framework of a multi-level partnership, an upper partnership, which indirectly participated in an asset transferred at book value under Section 6 (5) Sentence 3 Income Tax Act ("ITA"), changes its legal form into a corporation at book value, this will be considered an infringement of the retention period under Section 6 (5) Sentence 6 ITA
