PwC

Tax & Legal

Tax & Legal News – Issue 4, October 2013


In this issue: PwC Reports, Official Pronouncments, Supreme Tax Court Cases, From Europe and From PwC.

PwC Reports

  • Draft ordinance on permanent establishment profits

Official Pronouncements

  • Subject to tax rules in treaties
  • Withholding tax exemption on dividends on shares held in bank custody
  • Maximum foreign tax credit to take account of personal allowances
  • Automatic information exchange with Spain on pensions
  • Provisions to be taken up by public-private partnerships under normal accounting principles
  • Employee option in valuing staff purchases

Supreme Tax Court Cases

  • Organschaft parent need not be active business until subsidiary’s first year end
  • No provision for cost of meeting a future technical requirement
  • Container accounting – provision for return of bottles
  • Option premium not part of sale proceeds
  • No return of capital contribution in the same year
  • No correction in later years of tax auditor’s error
  • Write-down on some foreign investments permitted for 2001
  • Mobile phone discount is prepaid expense
  • Related party by ownership despite restrictions on exercise of ownership rights
  • Leasing fee for foreigners only taxable in so far as object used in Germany
  • No trade tax add-back for foreign dividends in 2001
  • Real estate transfer tax basis reduced if conveyancing costs borne by seller
  • No RETT if indirect change in partnership incomplete
  • Hidden distribution from foreign company is investment income in Germany
  • Gain on sale of profit participating right acquired before 2009 tax-free
  • Return of employee shares at fixed price leads to employment income
  • Permission to use company car privately is taxable benefit, but no presumption that prohibition on private use will be ignored
  • Chauffeur is taxable benefit for employee
  • Three-month limit on subsistence allowance upheld
  • Import value of DVDs includes estimated royalties payable by subsequent purchaser
  • No allocation of input tax to intended tax-free turnover
  • Liability for VAT in ceded debts cannot be avoided by contract
  • No VAT on sale of bad debts
  • Contractual agreement cannot limit a taxpayer’s duty to supply information

From Europe

  • Exemption from loss cancellation on change of shareholders may constitute state aid
  • Full inheritance tax exclusion for non-EU residents?

From PwC

  • Breaking news

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