The new Reorganization Tax Decree

The Federal Ministry of Finance (BMF) published a new letter regarding the application of the German Reorganization Tax Act (Umwandlungssteuergesetz) (so-called Reorganization Tax Decree (Umwandlungssteuererlass)) on 2 January 2025. The regulations contained therein are binding for the tax authorities. The new decree replaces the previous reorganization tax decree dated 11 November 2011. The following article […]

HIDDEN PROFIT DISTRIBUTION WITH MERELY ACTUAL POSSIBILITY OF USE

The German Fiscal Court (BFH) recently dealt with the question of whether the mere actual “possibility of use” of a property is sufficient for the existence of a hidden profit distribution. In the opinion of the BFH, this is not the case. Rather, a transfer for private use or actual private use is required for […]

Gift tax on the transfer of shares in the company

In the case of a gift tax event under § 7 para. 8 ErbStG (German Inheritance and Gift Tax Act), the Münster Fiscal Court considers it imperative – contrary to the opinion of the tax authorities – that the donor acts “in awareness of the gratuitousness”. This subjective element cannot be assumed merely because the […]

The Annual Tax Act 2024

The Annual Tax Act 2024 contains interesting and relevant changes for both private individuals and entrepreneurs. Important changes primarily affect start-ups in the context of employee participation, property owners with regard to the property tax reform and inherited properties, investment funds and investors. These changes and innovations will be briefly summarized in this article.

New version of the BMF letter on disproportionate profit distribution

The Federal Ministry of Finance has adjusted its opinion with regard to the income tax treatment of disproportionate profit distributions in line with the previous case law of the Federal Fiscal Court. According to this, in certain cases, even a resolution that breaches the Articles of Association should be sufficient for the tax recognition of […]

On the permissibility of vesting provisions for founders of start-ups

Vesting provisions for the founders of a start-up are regularly included in the investment and shareholder agreements (in short ISHA) after a financing round has been carried out. Nevertheless, the case law of the supreme and higher courts has not yet dealt with this. Now, the Berlin Court of Appeal (Kammergericht) has finally dealt with […]

BMF positions itself on the remote working permanent establishment

In the opinion of the BMF, remote working by employees does not regularly lead to the establishment of a permanent establishment. This is due to the fact that there is generally no power of disposal for tax purposes. However, as the tax authorities do not exclude remote working as a permanent establishment in every case, […]

Post-contractual non-competition clause of a GmbH managing director

In its ruling of 23 April 2024 (II ZR 99/22), the BGH ruled that a clause can be effectively included in the employment contract of a GmbH managing director according to which the managing director retroactively loses his claims to compensation for non-competition in the event of a breach of a post-contractual non-competition clause. This […]

Inflow of unpaid bonuses for controlling shareholder-managing director

In its ruling of 5 June 2024, the BFH decided that a bonus is not deemed to have been paid to the controlling shareholder-managing director (Gesellschafter-Geschäftsführer) if the company has not reported a bonus liability in the adopted annual financial statements. In this case, there is no due date, which in turn is a prerequisite […]