The ECI held that it is from the outset not compatible with EU-Law if the possibility for a partnership to form a VAT group – in addition to the controlling company â is limited to those partners in the partnership whose business is financially integrated into that of the parent. Such a restriction can only be justified by a specific need to prevent abuse. Continue reading
Tax & Legal
On April 14, 2021, after a long legislative process, the Finance Committee of the German parliament (âBundestagâ) has completed its consultation process on the law amending the Real Estate Transfer Tax Act (RETTA). Continue reading
In order to determine the content of an administrative act, the declared intention of the authority must be taken into account and not the literal meaning of the relevant wording; however, a notice clearly addressed to a specific addressee is not open to interpretation in this respect. This was decided by the Supreme Tax Court in a decision published on 8 April 2021. Continue reading
On 24 March 2021, the Federal Cabinet approved the German Federal Ministry of Financeâs draft legislation to modernize corporation tax (âBill to Modernise Corporation Tax Lawâ). The first reading before the Bundestag is expected on 22 April 2021. Continue reading
The German Constitutional Court overturned a 2019 judgment of the Supreme Tax Court regarding the erstwhile change in its case law on the issue of the income correction with respect to an unsecured group loan because the tax court failed to submit the facts of the case to the European Court of Justice (ECJ) for final clarification and thus violated the complainant’s right to the lawful judge under Article 101(1) of the Constitutional Statute. Continue reading
In two cases the Supreme Tax Court answered questions raised on the calculation of the âstay awayâ days (non-return days) of cross-border commuters when returning to their domestic residence from a third-country business trip and of the allocation of the right of taxation of the employment income of executive directors under the German / Swiss tax treaty. Continue reading
The German Central Tax office reminds of the reporting requirements pursuant to Section 138 (2) sentence 1 No. 4 of the German Fiscal Code and the consequences due to Brexit. Continue reading
On 22 March 2021, the Council of the European Union adopted an EU Directive expanding the scope of automatic exchange of information to digital platform operators and amending existing provisions on administrative cooperation in the field of taxation (âDAC7â). Continue reading
The ECJ held that services by an EU head office, who is part of a VAT group, to its foreign branch are in general subject to VAT if the cost of such services are charged to the branch. For VAT purposes head office and its branch located in another Member State must be regarded as separate taxable persons. Continue reading
On 24 March 2021, a government draft bill aiming to implement the Anti-Tax Avoidance Directive (ATAD) passed the cabinet (in the following referred to as âDraftâ) after lengthy political efforts. Continue reading