Tax & Legal

Tax & Legal

Publication: Key Tax Issues at Year End for Real Estate Investors 2020/2021

International tax regimes are diverse, complex and variant, and are usually full of fixed dates, terms and deadlines. These dates, terms and deadlines need to be observed carefully in order to avoid penalties and to receive certain tax reliefs or exemptions. At year end these obligations become even more difficult to understand and fulfil, particularly for real estate investors with investments in numerous countries. Continue reading

UPDATE: Land Tax Reform published in Federal Gazette on 2 December 2019

The coalition factions’ bill on the reform of the land taxes and valuation laws (Land Tax Reform Act), which was passed by the Bundestag on 18 October 2019  and approved by the Bundesrat on 8 November 2019 was published in the Federal Gazette on 2 December 2019 as the Act on the Reform of the Land Taxes and Valuation Laws

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Capital transfer tax not precluded by Sixth Directive

The ECJ has held that a Spanish transfer tax on the purchase of shares in a property-owning company is not similar to VAT and is therefore not precluded by the tax duplication prohibition of the Sixth Directive.


Transfers of shares in Spanish companies holding at least 50% of their assets in real estate are subject to a capital transfer tax if the transfer allows the acquirer effective control over the property. Transactions subject to this tax are specifically exempt from VAT under the VAT Act. A Spanish pension fund acquired 64% of the shares in a property company, bringing its total holding to 67%. It protested against its assessment to capital transfer tax on the grounds that the tax was, effectively, a substitute for VAT and thus precluded by the provisions of the Sixth (and now the VAT) Directive. However, the ECJ has rejected this claim, holding that the capital transfer tax is not similar to VAT and not therefore precluded by the Sixth Directive.


The ECJ case reference is C-139/12 Caixa d’Estalvis i Pensions de Barcelona, judgment of March 20, 2014.

Note: the corresponding German tax, real estate transfer tax (RETT), is levied on share transfers in any company owning German real estate that lead to the acquistion of an interest of at least 95%. The two taxes are not identical, although the arguments of the ECJ in support of the Spanish tax also hold good for the German levy.