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Tax & Legal

Supreme Tax Court: Income from convertible bonds subject to limited tax liability


Interest received by a US limited liability company from convertible bonds issued by a German debtor is subject to German withholding tax pursuant to Sec. 49 (1) No. 5 letter a Income Tax Act. This also applies if partial debentures were issued for these bonds. With its decision, the Supreme Tax Court put an end to the existing discussions and differing opinions in the professional literature regarding the correlation of two provisions in the Income Tax Act on that subject. Continue reading

Foreign managing directors, board members & authorized signatories – wage tax and criminal law risks –


Our Newsletter comments upon the recent trend of German tax authorities – particularly during wage tax audits – to consider whether a wage tax withholding obligation has arisen in cases where non-resident managing directors, board members and, in some cases, authorized signatories of German companies work for and in the interest of a German legal entity.

Depending upon the circumstances, an obligation to withhold wage tax may be considered even where there are no physical working days in Germany. Experience has shown that the tax authorities may also consider past obligations to withhold (potentially going back 10 years). In individual cases first criminal pre-investigations have even been initiated by the responsible authorities.
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Update: EU regulations force more tax transparency on multinationals


On 11 November the EU Parliament will vote on a provisional agreement with the Council that would oblige companies with an  annual revenue of more than €750 million and with operations in more than one country to declare the profits they have made, the corporate income tax paid and the number of employees in each EU country for the previous financial year. Continue reading

Foreign tax credit possible even if several options to reduce foreign withholding tax exist


The regional tax court of Rhineland-Palatinate had to decide whether, in the case of a right to choose between two methods of reducing foreign withholding tax, the taxpayer must ensure that foreign taxes are credited in as small an amount as possible. The regional tax court is of the opinion that it is at the discretion of the taxpayer if and how to use the option to which he is entitled and that this does not have an adverse impact on the general possibility of a foreign tax credit against his German income tax liability. Continue reading

サプライチェーン・デュー・ディリジェンス法と日本企業への影響


近時、日本を含む世界各国において、ESG/サステナビリティに関する議論が活発化する中、各国政府や関係諸機関において、ESG/サステナビリティに関連する法規制やソフト・ローの制定又は制定の準備が急速に進められています。企業をはじめ様々なステークホルダーにおいてこのような法規制やソフト・ロー(さらにはソフト・ローに至らない議論の状況を含みます。)をタイムリーに把握し、理解しておくことは、サステナビリティ経営を実現するために必要不可欠であるといえます。
今回は、ドイツのサプライチェーン・デュー・ディリジェンス(人権デュー・ディリジェンス)法と日本企業への影響について紹介します。

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Tax & Legal Newsflash – Italy issues draft circular on hybrid mismatch arrangements


The Italian Tax Authorities (ITA) launched, on October 18, a public consultation on the draft interpretative Circular Letter (the ‘Draft Circular’), which, at 111 pages, covers the application of the hybrid mismatch arrangements rules (the ‘Hybrid Rules’) as governed by Legislative Decree 142/2018 (the ‘ATAD Decree’) that implements the ATAD Directives through domestic italian legislation. Continue reading

German Desk Italy: The transfer of inventory existing in Italy as part of a transfer of going concern carried out abroad is an autonomous supply of goods for VAT purposes


In brief

With the reply to ruling no. 637, dated 30 September 2021, the Italian tax authorities provided clarifications on the correct treatment applicable for VAT and registration tax purposes to the transfer of inventory existing in Italy included in a wider transfer of going concern carried out abroad. Continue reading