Tax & Legal

Tax & Legal

Unutilised maintenance expenses deductible under Para. 82b  of the Income Tax Implementation Regulations fully deductible upon death

The Supreme Tax Court decided that where a taxpayer decides to set off major maintenance expenses over a period of several years in accordance with Para. 82b  of the Income Tax Implementation Regulations (‚ÄúEStDV‚ÄĚ) but dies before the full amount has been deducted, that part of the maintenance expenses not yet set off can be deducted as a rental income expense in the year of assessment in which the death occurred. This finding is at variance with Income Tax Guideline No. 21.1 Para. 6 Sentences 2 and 3 Income Tax Guidelines 2012 (EStR 2012) Continue reading

Foreign limited partnership does not shield non-trading income from German taxation

The Supreme Tax Court has held that rental income earned through a Hungarian partnership is not automatically exempt as the income from a foreign permanent establishment, merely because the partnership was taxed locally as a corporation, or because the income would have been treated as trading income had it been earned through a German partnership.

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