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Tax & Legal

Tax & Legal

Tax exemption for group restructurings under Section 6a Real Estate Transfer Act: Supreme Tax Court applies a broad interpretation.


The tax exemption from real estate transfer tax (RETT) in the event of restructuring within a group under Section 6a of the Real Estate Transfer Tax Act (RETTA) does not constitute State Aid prohibited by EU law. It can also apply to cases where a dependent company is merged with a controlling company. This was decided by the Supreme Tax Court in its ruling of 22 August 2019 – II R 18/19, published on 13 February 2020.  Continue reading

Real estate transfer tax: cancellation of a real estate transfer agreement


In its decision of 4 November 2009 (II B 48/19), published on 16 January 2020, the Supreme Tax Court held that Section 16(1) No. 2 Real Estate Transfer Act (“RETT Act”) did not provide for a time limit for the cancellation of purchase transactions. The special limitation period set out in Section 16 (4) RETT related to the cancellation of the agreement itself and not to the date on which an application was made to cancel the RETT assessment. Furthermore, in the circumstances, the cancellation was not a “retroactive event” within the meaning of Section 175 (1) Sentence 1 No. 2 of the General Tax Code. Continue reading

European Court of Justice: RETT exemption on conversions not illegal State Aid


Back in June 2017 we informed you of the Supreme Tax Court’s referral to the European Court of Justice of the question as to whether the RETT exemption on conversions(Section 6a Real Estate Transfer Tax Act) constitutes illicit State Aid. On 19 December 2018, the European Court of Justice held in A-Brauerei (C-374/17) that the RETT exemption granted in the case before it of an upstream merger did not infringe the State Aid rules. Continue reading

Supreme Tax Court to refer question to European Court of Justice on whether the real estate transfer tax exemption on conversions constitutes illegal state aid.


On 30 May 2017 the Supreme Tax Court decided to refer to the European Court of Justice (ECJ) the question of whether the real estate transfer tax (RETT) exemption on conversions – in Section 6a Real Estate Transfer Tax Act –   constitutes illegal state aid. Continue reading

Real estate transfer tax on share transfers unconstitutional


The Constitutional Court has held the set calculation of the value of the land held by a company when assessing the transfer of the company’s shares to real estate transfer tax to be unconstitutional. The government has been given until June 30, 2016 to enact a different formula, to be applied retroactively to January 1, 2009. Continue reading

Future obligation not chargeable to real estate transfer tax


The Supreme Tax Court has held that the acceptance by the acquirer of a plot of building land of an obligation to contribute towards the cost of building a kindergarten is not part of the consideration subject to real estate transfer tax if the obligation was not due at the time of the conveyance. Continue reading