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Tax & Legal

COVID 19: Summary of measures introduced to combat the effects of the coronavirus (COVID 19/SARS-CoV-2)


This article is intended to provide an overview of the current measures taken in connection with the spread of the coronavirus, particularly in tax law.

A: Material on tax measures in Germany;

B: Measures in other areas in Germany;

C: Measures at European level.

D: Measures worldwide Continue reading

Tax Authorities release tax measures to combat the effects of coronavirus (COVID 19/ SARS-CoV-2)


This morning both the Federal Ministry of Finance and the Supreme Tax Authorities of the Federal States (“the Länder”) released a circular and a decree (respectively) introducing tax measures to combat the effects of the coronavirus (COVID- 19 /SARS-CoV-2). In this Newsflash we would like to inform you of the measures.

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Joint ministerial notice released introducing support measures against the impact of the Corona Virus


The Federal Ministry of Finance has agreed with the Federal Ministry of Economics (“the Ministries”) on a far-reaching bundle of measures to protect jobs and safeguard companies of all sizes and in all sectors. These measures include tax liquidity support for companies. The measures were set out in a notice released on 13 March 2020. Continue reading

ECJ: VAT treatment of medical telephone consultations


In a judgement of 5 March 2020 the European Court of Justice (ECJ) dealt with the question whether telephone advisory services provided by a company on behalf of state health insurance funds through so-called “health coaches” may be free from VAT. The ECJ held that VAT exemption may indeed apply, provided the services have a therapeutic or curative objective and are of a comparable level of quality as the services provided by other suppliers in this field. Continue reading

Deductibility of double-household expenses incurred in advance


Expenses for an apartment are only deductible as double-household expenses incurred in advance if the taxpayer has made a conclusive decision to use the apartment in the future as part of a double-household deductible for tax purposes. Whether this is the case must be decided through an overall assessment of the objective circumstances of the individual case. Continue reading

Tax exemption for group restructurings under Section 6a Real Estate Transfer Act: Supreme Tax Court applies a broad interpretation.


The tax exemption from real estate transfer tax (RETT) in the event of restructuring within a group under Section 6a of the Real Estate Transfer Tax Act (RETTA) does not constitute State Aid prohibited by EU law. It can also apply to cases where a dependent company is merged with a controlling company. This was decided by the Supreme Tax Court in its ruling of 22 August 2019 – II R 18/19, published on 13 February 2020.  Continue reading

Supreme Tax Court discontinues proceedings with regard to the referral to the European Court of Justice on the State Aid character of tax privilege for public undertakings


The Supreme Tax Court had asked (decision of 13.03.2019 – I R 18/19) the European Court of Justice (ECJ) whether Article 107(1) Treaty on the Functioning of the European Union (TFEU) was to be interpreted as meaning that State Aid existed where, under the rules of a Member State, (permanent) losses – incurred by a company from an economic activity maintained without receiving sufficient remuneration to cover its costs – are in principle to be regarded as hidden dividend distributions and accordingly may not reduce the profit of the company, but, in the case of companies in which the majority of voting rights are held directly or indirectly by legal persons governed by public law, those legal consequences are not to be applied to permanent losses arising if such “public” corporations carry on the activities for reasons of transport, environmental, social, cultural, educational or health policy. Continue reading

Entrepreneurial status of members of the Supervisory Board


Where a member of a supervisory board receives a non-variable fixed salary for his services and as a result does not bear any risks vis-à-vis his remuneration, he is not acting as an entrepreneur. This was decided by the Supreme Tax Court in its ruling of November 27, 2019 – (V R 23/19 / R 62/17), thereby abandoning earlier case law. Continue reading

No correction of incorrect income tax assessment in the event of correct declaration of a capital gain by the taxpayer


The Supreme Tax Court held in its ruling of 10 December 2019 (IX R 23/18) that a final tax assessment can no longer be corrected by the tax office under Section 129 of the German Tax Code (“GTC” – obvious errors while issuing administrative acts) if the incorrect assessment of a capital gain whisch was correctly declared by the taxpayer under 17 of the German Income Tax Act was not based on a mere “mechanical error”. Continue reading