New real estate transfer tax pitfalls in share deal transactions
If the signing and the closing of the share deal occur at different times, the tax authorities consider that there are two transactions that are each subject to real estate transfer tax. As a result, real estate transfer tax may be assessed more than once for one and the same transaction. According to a new […]
Changes in real estate valuation for the purposes of inheritance and gift tax
The Annual Tax Act 2022 includes adjustments of the methods for valuing domestic real estate, which may lead to significantly higher real estate values. Real estate gifts will be particularly affected by this. From 1 January 2023, higher gift tax charges are to be expected in many cases. However, whether action is required shortly before […]
Finally some legal certainty regarding the obligation to notarize convertible loan agreements?!
Convertible loan agreements play an important role above all in the area of venture capital financing – whether at the very beginning as part of early-stage financing or also later in the growth phase, for example for interim financing between two investment rounds. The formal requirements to be taken into account when concluding convertible loan […]
Changes in foundation law – “Update” or mere unification?
The foundation law currently in force urgently needs to be reformed. German foundations pursue almost exclusively charitable purposes and have often existed for several hundred years. Currently more than 23,000 foundations exist in Germany. The following article deals with the adopted changes in foundation law with a special focus on the actual innovations, which go […]
Consequences of non-compliance from a company perspective
“If you think compliance is expensive, try non-compliance” – this much-quoted statement by former U.S. Attorney Paul McNulty makes it clear why it pays off to establish an appropriate compliance system as a preventive measure, even from a company’s point of view. This article deals with the potentially disastrous legal consequences of failing to implement […]
GmbH shares encumbered with usufruct – risk of indirect hidden profit distribution and arrangements
Usufruct arrangements allow the separation of assets and income of an entrepreneurial investment. In this way, different income tax and inheritance or gift tax objectives can be achieved. The ruling of the German Federal Fiscal Court of 14 February 2022, file no: VIII R 29/18 on an indirect hidden profit distribution in connection with GmbH […]
GmbH (German LLC) formation now digitally possible
On August 1, 2022, the Implementation Act for the EU Digitization Directive 2019/1151 (“DiRUG”) came into force. From now on, the formation of a GmbH or a UG (entrepreneurial company) is also possible from the comfort of one’s own desk chair instead of on the premises of a notary. However, notarial assistance is still required. […]
The new version of the German law on documenting essential applicable conditions for employment relationships (“Nachweisgesetz”, hereinafter referred to as “Documentation Act”) contains more extensive obligations of the employer to confirm working conditions in writing
As of 1 August 2022, the new version of the Documentation Act came into force, which implemented the EU Directive on Transparent and Predictable Working Conditions („Working Condition Directive“). This results in numerous additional necessities with regard to the written confirmation of the essential working conditions by the employer to the employees.
The tax-exempt donation of a family home in German inheritance and gift tax law
In the course of the Inheritance Tax Reform Act of December 24, 2008, the legislator revised the tax exemption for the donation of a family home and extended it to cases of acquisition upon death. A ruling by the BFH (German Federal Fiscal Court) dated December 01, 2021 (II R 18/20) on the question of […]
Managing director of a GmbH obliged to set up a compliance management system
In its ruling of 30 March 2022 (12 U 1520/19), the Nuremberg Higher Regional Court decided that managing directors are obliged to set up a compliance management system, with the consequence that they are liable for any resulting damage if they fail to do so. The ruling additionally specifies the specific monitoring obligations of the […]