PwC

Tax & Legal

Tax & Legal

Bundesrat reacts positively to exchange of information for tax-saving schemes


At its sitting on 22 September 2017 the Bundesrat (Federal Council/upper house) expressly welcomed the proposal for an amendment of Council Directive 2011/16/EU on administrative cooperation in the field of taxation to impose a reporting obligation on cross-border schemes. It has long been a demand of the Bundesrat that rules on reporting obligations be introduced. Continue reading

VAT: Referrals to European Court of Justice on imputed taxation (“Sollbesteuerung”) and margin-scheme taxation.


Supreme Tax Court judges have expressed doubt both upon the previously uncontested obligation of entrepreneurs subject to the so-called imputed taxation (“Sollbesteuerung) to pre-finance VAT and upon the exclusion of the reduced VAT rate on the provision of holiday apartment rentals according to the so-called margin-scheme taxation. The Supreme Tax Court has therefore referred two cases to the European Court of Justice (ECJ) (i) referral of 21 June 2017: V R 51/16; and (ii) referral of 3 August 2017: V R 60/16. Continue reading

Referral to Federal Constitutional Court: trade tax on the profits arising on the disposal of an interest in a partnership by persons other than individuals.


The First Senate of the Federal Constitutional Court heard arguments on the constitutionality of a provision in the Trade Tax Act, according to which trade tax was levied on the sale of business interests. The case has opened up a question of principle with regard to trade tax. Continue reading

Profit participation rights at fixed rate is interest under German-Austrian tax treaty


In a dispute between Germany and Austria on the right of taxation of payments from registered certificates the ECJ held that such interest should be taxed only in the country of residence of the beneficial owner unless such debt-claims explicitly provide the creditor with a participation in the debtor’s profits. Continue reading

Forfeiture of Loss relief: further referral to Constitutional Court.


On 29 August 2017, the Hamburg Tax Court referred a question to the Constitutional Court on the constitutionality of the rules on the full forfeiture of loss relief under Section 8c 2nd Sentence of the Corporation Tax Act “CTA” (as amended by the Business Tax Reform Act of 2008 -now Section 8c (1) 2nd Sentence CTA ). The referring court is convinced that the rule is unconstitutional. Continue reading

VAT grouping and input VAT deduction for holding companies


Following decisions of the European Court of Justice and the German Supreme Tax Court the Federal Finance Ministry has issued guidelines on the VAT grouping and the input VAT deduction for holding companies. In a special VAT Newsflash our tax experts take a closer look on the situation as a whole. Continue reading

Multilateral Convention to counter aggressive tax avoidance arrangements has been signed.


On 7 June 2017 Germany together with the representatives of over 60 countries signed the multilateral convention, which should transpose the main recommendations of the G20/OECD Project against Base Erosion and Profit Shifting (BEPS Project) into existing bilateral tax treaties. Continue reading