Following the discussions of the Conference of Finance Ministers of the Federal States, the government has included in the Finance Bill 2019 amended regulations in respect of so-called “share deals” in real estate transactions. Aim of the proposed rules is a tightening of the financial framework around the indirect “transfers” of real estate held through companies and other associations of persons. The draft bill includes the following amendments: Continue reading
Tax & Legal
On 8 May 2019, the Federal Ministry of Finance published a draft bill for the proposed legislation on the further tax stimulation of electro-mobility and changes to other tax regulations. The proposed Act on the Further Tax Stimulation of Electric Mobility and on the Amendment of Further Tax Regulations provides for measures for to give tax incentives to environmentally friendly mobility, as well as providing amendments to various areas of tax legislation requiring technical adjustments.further The draft also looks to introduce legislation to combat tax structuring schemes and secure tax revenue. Furthermore, the draft bill integrates makes necessary alignements to EU law and case law of the European Court of Justice (ECJ). The draft bill also contains the expected regulations to limit of the avoidance of real estate transfer tax through so-called share deals. Continue reading
The Supreme Tax Court has ruled the expenses of a football trainer for a Sky subscription to German football league (“Bundes League”) games may be treated as tax-deductible expenses from self-employed income. The appellant was a full-time trainer of goal keepers working in licensed football. Continue reading
The Supreme Tax Court has ruled that written warnings issued by a copyright holder in order to enforce his copyright following a breach are subject to VAT. The consideration for the written warning (deemed a service) was the payment from the person charged with breaching the copyright. Continue reading
According to a decision of the Supreme Tax Court, the leasing instalments paid in cases of refinancing by a leasing company were also to be included in the calculation of the trade tax base. The bank privilege in the Trade Tax Implementation Ordinance did not apply to the notional interest portion of the leasing instalment. Continue reading
The Federal Ministry of Finance has officially clarified in a circular published in April that fees or remunerations paid for the placement of online advertising are not subject to German withholding tax under Section 50a paragraph 1 No. 3 Income Tax Act.
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Issue 2 of our Newsletter for 2019, including news about the Ministry of Finance draft discussion document for the promotion of R&D, a Supreme Tax Court decision on non-deductible deemed business expenses in relation to merger profits within a tax group, and an ECJ decision about passive income attribution from controlled companies resident in third countries Continue reading
According to the Düsseldorf Tax Court in a ruling of 29 January 2019 (press release from 2 April 2019), the issue of shares in Hewlett-Packard Enterprise Company (HPE) to shareholders of Hewlett-Packard Company (HPC) did not constitute taxable income. Continue reading
Under the extended trade tax deduction, rental income derived by entities whose activities are limited to the administration of their own real property is deductible from the trading income subject to trade tax. The Grand Senate of the Supreme Tax Court held that this trade tax deduction is also available for a commercial GmbH & Co. KG with respect to its interest in a pure asset-management civil law partnership. Continue reading
If a corporation is merged into its parent company, which in turn is a controlled company within a corporation tax group (fiscal unity/“Organschaft”) with a corporation as the controlling company (“Organträger”), the Supreme Tax Court has ruled that no flat-rate deemed business expenses are to be added back to profits under Section 8b (3) sentence 1 of the German Corporation Tax Act (CTA) either at the level of the parent company or at the level of the controlled company, where the said non-deductible flat-rate deemed business expenses are derived from a merger gain. Continue reading