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Tax & Legal

Tax & Legal

No trade tax add-back of rental costs allocated to production costs of current assets


Rental and lease payments for the use of movable fixed assets are not to be added back to trading profits in accordance with Section 8 No. 1 Letter d Trade Tax Act (TTA), insofar as they are to be attributed to the costs for the production/manufacture of current assets. This will also be the case in situations where the rent and lease payments would have been capitalized as production costs, had the asset still been included in the business’ assets as at the balance sheet date and therefore had to have been capitalized. This was decided by the Supreme Tax Court in a ruling published on 12 November 2020. Continue reading

Federal Cabinet releases draft bill for post-covid stimulus package


The German Federal Cabinet has released the draft bill on the crisis management package aimed at mitigating the economic impact of the COVID 19 pandemic. The bill is due to have its first reading at the Bundestag on 19 June 2020, with the 2nd /3rd readings and the final decision of the Bundesrat expected on 29 June 2020. On this timetable the publication in the Federal Law Gazette should occur on 30 June 2020, with the law becoming effective on 1 July 2020. Continue reading

Refinancing by leasing companies: treatment of notional interest portion of leasing instalments


According to a decision of the Supreme Tax Court, the leasing instalments paid in cases of refinancing by a leasing company were also to be included in the calculation of the trade tax base. The bank privilege in the Trade Tax Implementation Ordinance did not apply to the notional interest portion of the leasing instalment. Continue reading