Tax & Legal

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Tax & Legal

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

Tax & Legal Newsflash – Non-residents’ income from domestic registered rights – Ministry of Finance Circular of 6 November 2020

On 6 November 2020, the Federal Ministry of Finance issued a circular regarding the obligation for non-resident taxpayers to submit tax returns for license income from rights registered in a domestic register. Read our Newsflash here:


Newsflash Domestic Registered Rights

Ministry of Finance: comments on amended requirements for intra-community supplies

The German Federal Ministry of Finance has commented on the changed requirements for intra-community supplies resulting from the Act on Further Tax Incentives for Electromobility and on the Amendment of other Tax Regulations – Finance Act 2019: “FA 2019” – amending the VAT Act Application Ordinance accordingly. Continue reading

Deductibility of costs for an office at home where employer operates a hot desking policy

Where the employer operates a hot desking / desk sharing policy, i.e. the employer does not allocate specific workspace to individual employees but rather provides a pool of workspaces, “other workspace” is nevertheless available to the employee, so that the exception to the general rule restricting the deduction of costs for an office in the home did not apply. This was decided by the Tax Court of Hesse in a recent ruling. Continue reading

Italy Step up regime: Italy reinstates modified ‘step-up’ regime with 3% substitutive tax

In brief

As part of its response to the global pandemic, the Italian government reinstated the asset step-up regime in August. The regime applies a 3% substitutive tax on assets accounted for as of December 31, 2019. If a taxpayer elects the step-up, then the higher values shall be disclosed in the 2020 financial statements and can be deducted for direct tax purposes starting from the tax period that includes December 31, 2021. Continue reading

Federal Ministry of Finance: draft circular on the application of Section 8d of the Corporation Tax Act

The Federal Ministry of Finance has sent the draft of a Ministry circular on the application of Section 8d of the Corporation Tax Act (CTA) – continuance-bound loss carry-forward after loss forfeiture – to the professional associations for comment. 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