Tax & Legal

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Tax & Legal

Gift Tax : Benefit provided to person related to a shareholder

The Supreme Tax Court decided in three separate cases that the payment of excessive consideration under the terms of a contract between a GmbH and a party related to the shareholder is not a partial gift by the GmbH, if the shareholder was involved in the conclusion of the contract between the GmbH and the related party. In such a case the benefit granted arises from corporate relationship between the GmbH and the shareholder. With these decisions the Supreme Tax Court has changedn its earlier jurisprudence on this question. Continue reading

ECJ – Opinion of Advocate General: losses of non-resident permanent establishment

On 17 January 2018 the Advocate General Campos Sánchez-Bordona published an opinion on a referral to the European Court of Justice (ECJ) by the Eastern Regional Court in Denmark. The case relates to the entitlement of a Danish company to set off the final losses of its Finnish permanent establishment (PE) and the compatibility with EU law of Denmark’s “international joint taxation” scheme. Continue reading

Crowdfunding: treatment of donations

The Federal Ministry of Finance published a circular on 15 January 2018 on crowdfunding and the conditions for its deduction as a charitable donation. The circular defines various types of crowdfunding and makes a distinction between classic crowdfunding, donation-based crowdfunding and debt-based crowdfunding (also referred to as peer-to peer lending or crowdlending). Continue reading

Exemption of loss forfeiture for troubled businesses illicit state aid?

The exception of the German loss restriction rules for acquisitions in the course of a rescue operation to save a troubled business was held by the European General Court as a selective measure as it favours certain companies – those in financial difficulties – over their competitors in the marketplace. Two cases were brought to the ECJ for final clarification. The advocate general in one of the cases now proposes that the ECJ overturn the judgment of the General Court to the extent that it dismissed the action as unfounded. Continue reading

US tax reform legislation signed by President Trump

Congress on December 20, 2017 gave final approval to the House and Senate conference committee agreement on tax reform legislation that would lower business and individual tax rates, modernize US international tax rules, and provide the most significant overhaul of the US tax code in more than 30 years. President Trump signed the tax bill on 22 December 2017. Continue reading