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Tax & Legal

Climate Protection Progamme 2030 – changes in tax law


On 25 October 2019, the German Bundestag discussed the implementation of the climate protection programme 2030 into tax law. This was followed by a public hearing on 6 November 2019.

The bill for the implementation of the climate protection programme 2030 in tax law had been adopted by the Federal Government on 16 October 2019.

The amendments to the law will initiate tax measures designed to support climate protection in the areas of transport, housing and energy generation. Continue reading

CFC rules considered to be in line with EU law


Following a ruling by the European Court of Justice (ECJ) earlier this year, the Supreme Tax Court held in its decision of 31 October 2019 that the incorporation into the tax base of controlled company income from invested capital from an intermediary company domiciled in Switzerland in the financial year 2006 may restrict the free movement of capital, but it is justified through compelling reasons of public interest and does not therefore contravene EU law. Continue reading

UPDATE: Land Tax Reform published in Federal Gazette on 2 December 2019


The coalition factions’ bill on the reform of the land taxes and valuation laws (Land Tax Reform Act), which was passed by the Bundestag on 18 October 2019  and approved by the Bundesrat on 8 November 2019 was published in the Federal Gazette on 2 December 2019 as the Act on the Reform of the Land Taxes and Valuation Laws

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Publication of draft proposal regarding mandatory disclosure rules for cross-border tax arrangements in Germany


On 26 September 2019, the German Ministry of Finance has published a draft proposal regarding the implementation of mandatory disclosure rules for cross-border tax arrangements, which is now subject to a consultation process with business and professional associations ending on 30 September 2019. This Newsflash provides a summary.tax_legal_newsflash_DAC6_30092019. 2docx

Finance Bill 2019 gets green light from Federal Cabinet


On 31 July, the Federal Cabinet adopted a draft Finance Bill 2019 referred to as the “Act on the Further Tax Promotion of Electric Mobility and on the Amendment of Further Tax Regulations”. As its name suggests the bill focuses on tax incentives for electro-mobility but includes legislation in numerous other areas of tax law. Continue reading

Restrictions to the “tainting effect” of trading partnership income for trade tax purposes


For income tax purposes, income of a partnership from leasing and letting or from capital assets is to be reclassified as trading income where the partnership also receives a negligible amount of income from a participation in a trading partnership; however, such “tainted” income is not subject to trade tax. This was decided by the Supreme Tax Court in its ruling of 6 June 2019, published on 1 August 2019. Continue reading

European Court of Justice: Final Losses


The European Court of Justice held in its decision Memira Holding AB issued on 19 June 2019 that when assessing whether the losses of a non-resident subsidiary are final within the meaning of its judgment in Marks & Spencer on 13 December 2005 (C446/03), the fact that, in the event of a merger, the subsidiarys Member State of establishment does not does not allow the losses of one company to be transferred to another company liable for corporation tax, is not decisive, unless the parent company can demonstrate that it is impossible for it to deduct those losses through ensuring that – in particular by means of a sale- the losses are fiscally taken into account by a third party for future tax periods. Continue reading