The Constitutional Court has held the treaty override provisions of the Income Tax Act making treaty exemption dependent upon proof of taxation or explicit exemption in the other state do not breach the formal provisions of the constitution if they took effect after enactment of the treaty. Continue reading
Tax & Legal
The Supreme Tax Court has followed its previous case law in holding that the provision calling for taxation of treaty-exempt income if the other state does not exercise its right to taxation can only be applied if permitted by the treaty. Continue reading
The Supreme Tax Court has held that the treaty override provision making tax exemption of foreign income dependent on tax compliance in the other state is, unless mirrored in the treaty, in breach of international law and therefore unconstitutional. It has referred to the Constitutional Court for a ruling. Continue reading
he Supreme Tax Court has held that the treaty override clause in the Income Tax Act is to be ignored altogether where only part of the income is taxed in the foreign state. Continue reading
The Supreme Tax Court has laid its doubts on the constitutional propriety of the treaty override switch over provision in respect of employment income not taxed in a foreign state with the taxing right under a treaty. Continue reading
The Supreme Tax Court has held that once a foreign state has waived its treaty right to tax income, there is no scope for a treaty override clause in German law.
The Supreme Tax Court has held that a closed private equity/venture capital fund is a trading venture taxable in its country of establishment. If it is exempt there by reason of local regulation, its income does not revert to German taxation by virtue of treaty or statutory provisions on conflicts of qualification.
The finance ministry has announced that application of a Supreme Tax Court judgment exempting US profit-based interest from German taxis to be seen against the treaty override provision of 2006.
The Supreme Tax Court has held that the treaty attribution of the royalty income charged by a US partner is to his US business. Accordingly, it is not taxable in Germany as partnership profits.