Tax & Legal

Tax & Legal

UPDATE : Bundestag passes the Act to Modernise the Relief of Withholding Taxes and the Certification of Capital Gains Tax

On 5 May 2021, the Bundestag passed the Act to Modernise the Relief of Withholding Taxes and the Certification of Capital Gains Tax. The law as passed is based on the resolution recommended and passed by the Bundestag Finance Committee on 21 April 2021.

The approval of the Bundesrat is still pending. The appointed date for this is 28 May 2021. Continue reading

Tax loss of value of shares following the opening of insolvency proceedings

If the shareholder’s right of membership in a domestic stock corporation (AG) lapses because the AG is dissolved, wound up and deleted from the register as a result of insolvency, the shareholder incurs a taxable loss if he does not receive his contribution back in full or in part. If such shares are deleted from the shareholder’s securities account by the custodian bank before the AG is removed from the register, the loss will be considered to arise at the time of the deletion by the custodian bank. However, a loss cannot already be assumed to have arisen at the point when a distribution of assets can no longer be objectively expected as part of the final distribution of the assets of the AG or when the listing of the shares on the stock exchange is discontinued or their listing is revoked.  This was the judgment (VIII R 20/18) of the Supreme Tax Court on November 17 2020 and published on 11 March 2021. Continue reading

No obligation to file electronic tax returns where economically unreasonable

In a decision of the Supreme Tax Court published on 12 November 2020, the Court held that the electronic filing of an income tax return may be considered unreasonable from an economic point of view, where the cost of setting up and maintaining a system for the transmission of remote data bears no meaningful economic correlation to the income triggered by the obligation to file the tax returns electronically   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

Write-up of shares in GmbH not part of tax-neutral profit transfer

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