PwC

Tax & Legal

Tax & Legal

German rule on taxation of hidden reserves on contribution of business for shares upheld


The ECJ has upheld a German rule providing for immediate taxation (but with a deferral option) of the capital gain inherent in the excess of the market over the book value of a business transferred to a corporation in exchange for shares where as a result of the transaction Germany would lose the right to tax the gain on any subsequent sale of the shares. Continue reading