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Tax & Legal

Tax & Legal

Medical telephone consultations through „health coaches” exempt from VAT


Telephone advisory services provided by a company on behalf of state health insurance funds through so-called “health coaches” may be exempt from VAT under Article 132 (1) of the VAT Directive as “medical treatment in the field of human medicine”, if the consultations have a therapeutic purpose. This was the conclusion of the ECJ following on a request for a preliminary ruling brought by the Supreme Tax Court. The latter has now issued its subsequent (follow-up) decision and referred the case back to the Lower Tax Court for further fact finding. Continue reading

No option for full tax assessment by U.S. citizen living in the EU


According to a judgment of the Supreme Tax Court, a U.S. citizen with limited tax liability in Germany is not entitled to the right of full tax assessment for income from employment even if he lives in an EU or EEA state (here: the Netherlands). The non-discrimination clause in Article 24 of the German/US double tax treaty does not give rise to a claim to equal treatment with a German national with limited tax liability. Continue reading

RETT: Change of shareholders in real estate partnership


The Supreme Tax Court has granted a taxpayer’s appeal against a real estate transfer tax assessment on the grounds that an indirect change in the shareholdings in the members of a real estate partnership was less than a complete change of interest in the partnership. With its decision the court has confirmed its case law regarding share transactions made prior to the enactment of the Tax Amendment Act 2015. Continue reading

Supreme Tax Court: suspension of limitation period where claim for a refund exists


In a decision published on 5 November 2020, the Supreme Tax Court held, that the application of Section 171 (14) General Tax Code (“GTC”) is not restricted to cases of invalid tax assessments. Rather, any claim for a refund connected to a tax claim can in principle trigger a suspension of the run down to statutory limitation. However, if the refund claim is to suspend the limitation period for assessments, the claim must have come into existence before the expiry of this limitation period. Payments made in anticipation of an expected change to tax assessments for the years in dispute gave rise to a refund claim thus triggering the suspension of the limitation period under Section 171 (14) GTC as there was no formal legal basis for the payment. Continue reading

Shareholding in corporation as a Special Business Asset II


The Supreme Tax Court has ruled that for the purposes of considering the allocation of a partner’s share in a GmbH to the Special Business Assets II of his partnership interest, regard must be had not only to the business relationship of the GmbH with the partnership – but also to whether the GmbH has a substantial business operation of its own. Continue reading

Supermarket discount model “Membership” is subject to the standard tax rate VAT


In its judgment of 18 December 2019 (XI R 21/18) published on 22 May 2020, the Supreme Tax Court ruled that the granting of a right to purchase goods at a reduced price (in the form of a “membership”) constitutes an independent service for VAT purposes and not just a service ancillary to the subsequent sale of goods. Even if the supermarket sells goods that are subject to both the standard tax rate (19%) and the reduced tax rate (7%), the standard tax rate is to be applied to the membership fee. 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