Management participation programs have always been in the spotlight of tax authorities, as in those cases a distinction has to be made between fully taxable wages and tariff-favored income from capital investment. Tax authorities have particularly classified leaver provisions as a decisive indication for the existence of wage. However, the Federal Court of Finance (BFH) […]
The Federal Court of Justice [Bundesgerichtshof – BGH] has consistently extended the analogous applicability of the provisions under corporate law to Limited Partnerships with Many Members of the Public as Limited Partners [Publikums-Personengesellschaften] (hereinafter “Publicly Held Partnership”). However, it has so far not been decided by the BGH, whether the special audit in accordance with […]
Contracts for work and services [“Werkverträge”] which have been concluded after 1st January 2018 are subject to amended regulations. In particular, the law applying especially to construction contracts was substantially reformed. In addition, “Bauträgerverträge” [building developer’s contracts] as well as “Architekten- und Ingenieursvertrag” [architect’s and engineering contracts] were regulated in the German Civil Code [Bürgerliches […]
By its judgment of 11 July 2017 – IX R 36/15, the German Federal Fiscal Court (BFH) has fundamentally changed its jurisdiction regarding the clasification of equity-replacing financial aids of shareholders to their company as acquisition costs within the scope of section 17 of the German Income Tax Act (EStG). Financial aids are, for example, […]
By resolution dated 28 November 2016, file number GrS 1/15, the Grand Senate of the Federal Fiscal Court (BFH) declared the so-called restructuring decree illegal. The legislator recognized the needs for the restructuring of companies and created a new legal basis for the tax exemption of restructuring profits (see our newsletter article in 2017 | […]
Basically, the managing director of a limited liability company can quit his position as managing director at any time and without notice period by simple notification. However, such resignation from his position is subject to certain restrictions. In particular, if the resigning managing director is the sole shareholder and managing director of the limited liability […]
Pursuant to section 112 of the German Stock Corporation Act (AktG), an AG is represented by the Supervisory Board if it acts towards the Management Board. The BGH has recently ruled on when there is no such action towards the Management Board by applying the principles developed with regard to self-dealings in accordance with section […]
Nowadays, information is not only worth a lot of money, but rather one of the most important assets of a company. The fiscal authority would like to share information with other countries, without the taxpayer’s knowledgement or possibilities for defence. Furthermore, the tax law only offers insufficient protection, so that an alert involvement in the […]
In the posting directive dating back to 1996, certain minimum conditions concerning the employment of workers at operations abroad within the European Union are provided which have been adopted in Germany through the law on posting of workers. In March 2016 the European Commission initiated a revision of the directive with the purpose of achieving […]
Warranty & Indemnity insurances (W&I) play an increasingly higher role in company sales. The parties to an M&A transaction should familiarize with the fundamental operating principle of this “tool”. This is particularly essential, because meanwhile many sellers require a W&I insurance as a precondition in order to receive a bid during a bidding process.