Tax & Legal

Tax & Legal

UPDATE: Bundestag approves Tax Haven Defence Act

On 10 June 2021, the Bundestag approved the “Act to avert tax avoidance and unfair tax competition and to amend other laws”. In doing so, the Bundestag followed the recommendation of the Finance Committee.

The defence mechanisms contained in the bill (19/28901) are intended to make it more difficult for individuals and companies to avoid paying taxes in Germany through business relations with states and territories that are on the EU list of non-cooperative tax jurisdictions. The measures envisaged include, for example, the denial of tax benefits or deductions.

Continue reading

Tax loss of value of shares following the opening of insolvency proceedings

If the shareholder’s right of membership in a domestic stock corporation (AG) lapses because the AG is dissolved, wound up and deleted from the register as a result of insolvency, the shareholder incurs a taxable loss if he does not receive his contribution back in full or in part. If such shares are deleted from the shareholder’s securities account by the custodian bank before the AG is removed from the register, the loss will be considered to arise at the time of the deletion by the custodian bank. However, a loss cannot already be assumed to have arisen at the point when a distribution of assets can no longer be objectively expected as part of the final distribution of the assets of the AG or when the listing of the shares on the stock exchange is discontinued or their listing is revoked.  This was the judgment (VIII R 20/18) of the Supreme Tax Court on November 17 2020 and published on 11 March 2021. Continue reading

Publication: Key Tax Issues at Year End for Real Estate Investors 2020/2021

International tax regimes are diverse, complex and variant, and are usually full of fixed dates, terms and deadlines. These dates, terms and deadlines need to be observed carefully in order to avoid penalties and to receive certain tax reliefs or exemptions. At year end these obligations become even more difficult to understand and fulfil, particularly for real estate investors with investments in numerous countries. Continue reading

EBA: Report and Action Plan on dividend arbitrage trading schemes such as Cum/Ex and Cum/Cum within the EU

On 12 May 2020, the European Banking Authority – EBA – published its report on the measures and reactions of the addressed authorities in the EU Member States on dividend arbitrage trading, such as Cum/Ex and Cum/Cum schemes. The report states that the relevance of dividend arbitrage trading schemes for the risk management of credit institutions is viewed differently. This is due, in particular, to the different tax systems of the Member States. Nevertheless, the EBA concludes that facilitating tax fraud is detrimental to the integrity of the financial system across the EU as a whole. The EBA is therefore presenting an action plan connected to recent legislative changes in the areas of the Capital Requirements Directive (CRD IV/V) and the Anti-Money Laundering Directive. The Action Plan, with steps taken by the EBA itself as well as and other measures suggested by the EBA, complement existing instruments used by competent authorities and credit institutions. Continue reading