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Tax & Legal

Tax & Legal

Input VAT claims and Brexit


Prior to the announcement on 21 March 2019 that Brexit may be postponed until either 12 April 2019, 22 May 2019 or possibly later, the British tax and customs authorities (HMRC) issued guidance on 18 March 2019 on the changes to VAT IT systems in the event of the United Kingdom leaving the EU on 29 March 2019 without a deal. Continue reading

Unlimited tax liability with dual residency


The fact that a taxpayer has both a residence in Germany and a residence abroad does not, according to a ruling by the Supreme Tax Court, preclude the existence if an unlimited tax liability even when the foreign residence constitutes the centre of the taxpayer’s vital interests Continue reading

No withholding tax on fees for online advertising


In the past in some individual cases, tax audits in Bavaria considered fees paid to foreign online companies for “advertising services” as the transfer of advertising rights. This caused irritation and some excitement with respect to a possible obligation for German withholding tax to be deducted at source from those payments. In the course of internal discussions and under the leadership of the Bavarian tax administration a joint agreement has now been reached amongst the tax administrations of all German states (“Länder”) – with a favourable outcome. Continue reading

Draft discussion document for the promotion of R&D


In a draft discussion document the Federal Ministry of Finance has revealed plans for an annual research and development (R&D) grant costing a total of € 1.25 billion per annum. The plans provides for an initial duration of four years, after which an evaluation will follow. The Finance Ministry is thus currently planning total subsidy to the value of € 5 billion. According to the draft, the federal and state governments should each pay half of this amount. Continue reading

ECJ provides guidance on beneficial ownership and abuse of rights


On 26 February 2019, the ECJ issued its judgements in the joined cases T Denmark and Y Denmark -v- the Danish Ministry of Taxation (C-116/16 and C-117/16) and N Luxembourg 1, X Denamrk A/S, C Danmark I and Z Denmark ApS -v- the Danish Ministry of Taxation ( C115/16. C-118/16, C-119/16 and C-299/16). These cases related to the question of whether dividend and interest payments were exempt from withholding tax, when the payments were made from a Danish company to a EU-resident company, and then(fully or partially) passed on by the EU-resident to the ultimate parent resident in a third country. Continue reading

The Italian Budget Law 2019


The last version of the Italian Budget Law 2019 has been published in the Gazzetta Ufficiale from the 31. December 2018 and entered into force on the 1st of January 2019. The provisions include interesting innovations on the tax environment for taxpayers, both   legal entities and natural persons.

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Free movement of capital in cases of shareholdings of at least 10%


In its judgement of 24 July 2018, published on 30 January 2019, the Supreme Tax Court held that with regard to national provisions with a requirement of a minimum shareholding of at least 10%, the principle of the free movement of capital is not blocked by the principle of freedom of establishment. Whilst the judgement specifically related to a legal provision, which is no longer applicable, it represents a departure by the Supreme Tax Court from its previous view on this issue. Continue reading