On 13 March 2018, the ECOFIN Council, composed of the EU-28 Finance Ministers, reached political agreement on a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements in order to disclose potentially aggressive tax planning arrangements (also commonly referred to as DAC6).
Tax & Legal
Courts may not interpret contracts governed by foreign law according to German law. The legal terms used by the contracting parties in the text of the contract are to be given their proper meaning under foreign law. The German courts have to apply the foreign law in the way it would have been interpreted and applied by the courts of the relevant foreign state. Where necessary they must consult an expert for this purpose. Continue reading
The European Court of Justice issued a joint judgment in two cases regarding the Dutch group taxation regime under which a parent company is not allowed to deduct interest in respect of a loan taken from a Swedish related company in order to finance its capital contribution to an Italian subsidiary. This is held to be in conflict with the EU freedom of establishment. On the other hand, the refusal to deduct currency losses resulting from fluctuations in the exchange rate is viewed by the court as being not in violation of EU-law. Continue reading
On 15 February 2018 the European Commission launched a compliance check to assess whether VAT refunds to businesses in EU Member States are made quickly enough and are in line with current EU law and case law of the European Court of Justice. Continue reading
In its decision in Hamamatsu Photonics Deutschland (C-529/16) the European Court of Justice (ECJ) held that Articles 28 to 31 of the Customs Code (old version) must be interpreted as meaning that they do not permit an agreed transaction value, composed of an amount initially invoiced and declared and a flat-rate adjustment made after the end of the accounting period, to form the basis for the customs value, without it being possible to know at the end of the accounting period whether that adjustment would be made up or down. Continue reading
The Supreme Tax Court has decided that a gain arising from a share disposal can be rolled-over on a tax-neutral basis under Section 6b Income Tax Act where the privileged asset has been sold to a related entity. However, the Court also ruled that the part of the gain attributable to the write-up of the privileged asset – where the earlier write-down of the shares had reduced the taxable profits -could not be rolled over as a tax-neutral transfer under section 6b of the Income Tax Act. Continue reading
The Union and Social Democrats have finally clinched a deal and assented to a coalition agreement. The policy document includes a considerable number of matters impacting on the tax system. NewsFlash – 8 February 2018
In this issue: Official pronouncements, Tax Court Cases and From Europe Continue reading
The Ministry of Finance published a circular on 2 February 2018 with a preliminary list of countries participating in the automatic exchange of information in the period to 30 September 2018. The final list should be available by the end of June 2018. Continue reading
The Supreme Tax Court has decided that where an intermediary partnership holds direct or indirect interests in a real-estate-owning company, the relevant holding for establishing its interest in the related real-estate holding company, is its interest in the capital of the partnership and not the interest in the jointly owned property according to the law of property. Continue reading