The German refusal of a deduction for social security contributions paid by a German resident French government official does not meet the EU-requirement for free movement of workers, since its effective exclusion under German law placed her at a comparative disadvantage vis-à-vis her German colleague. Continue reading
Tax & Legal
On 29 May 2017 the Council of the EU formally and unanimously adopted the Council Directive amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries (ATAD II). Continue reading
The subject-to-tax provision of the Parent-Subsidiary Directive, whereby distributed dividends are exempt from withholding tax, requires that the dividends are taxed in the hands of the parent company. In practice, this necessitates actual payment of the tax. Continue reading
The ECJ held that an exempt intra-community supply should not be taxable merely because of a missing VAT registration No. where there is no suggestion of evasion and the other conditions for exemption are fulfilled. Continue reading
The ECJ held that the sale of blood plasma for the manufacture of medicines does not fall under the VAT exemption applicable to supplies of human blood. As a result a deduction of the underlying input VAT relating to the supply of plasma is available. Continue reading
The ECJ held that the correction of formal invoicing errors is allowable with retroactive effect on the input tax deduction. Continue reading
The ECJ held that the German inheritance and gift tax option for taxation as a resident does not fully resolve the conflict with EU law from the lower personal allowances for non-residents. In consequence and considering an earlier ECJ judgment of April, 2010 the referring Lower Tax Court now finally ruled in favour of the taxpayer. Continue reading
The EU Commission has published guidance when or whether public spending falls within, and outside, the scope of EU State aid control. This guidance will help public authorities and companies to identify when public support measures can be granted without needing approval under EU State aid rules. Continue reading
The ECJ has held that an obligation on a German bank to report assets held by German customers of its Austrian branch to the German tax authorities does not restrict the bank’s freedom to establish itself in Austria.
The Inheritance and Gift Tax Act requires banks to notify the responsible inheritance tax office of assets held for deceased German resident customers on the day of death. The requirement applies to banks operating in Germany and therefore, by implication to assets held for German customers of foreign branches. A German bank faced with a tax office demand for information under this provision protested its inability to comply in respect of accounts held at its Austrian branch as Austrian law, at the time, made it a criminal offence to do so. The Supreme Tax Court saw this conflict of laws as a possible hindrance on the German bank’s freedom to establish an Austrian branch and referred the question to the ECJ.
The ECJ has now held that a reporting obligation of this nature on a bank in respect of accounts held at a foreign branch does not constitute a restriction on the bank’s freedom of establishment, even though locally owned banks in the foreign country concerned are under no such obligation. It mentions that breach of the Austrian bank secrecy rules was a criminal offence, but offers no discussion on the implications of this clash of concept. It also offers no comments on the Austrian criminal or civil legal consequences of compliance with the tax office’ request made before the current EU Council directive on administrative cooperation between member states in respect of bank accounts takes effect (2017).
The ECJ case reference is C-522/14 Sparkasse Allgäu judgment of April 14, 2016.
An ECJ advocate general has suggested that a tax treaty can justify a hindrance on the free movement of capital from granting a tax credit privilege to recipients of a dividend from a third country but not to those with dividends from a member state. Continue reading