New Provisions of Real Estate Transfer Tax for Cases when Signing and Closing take Place on Different Dates
The separation of Signing and Closing stages in the context of a share deal and the associated fulfilment of multiple acquisition transactions pursuant to Section 1 German Real Estate Transfer Tax Act (GrEStG) has already been subject of our newsletter on several occasions (most recently in Q4/2025). The divergence in the views of German tax […]
Closing rather than Signing – Fiscal Court of Münster strengthens taxpayers’ position regarding the retention period for inheritance tax purposes
When are business assets eligible for tax relief deemed to have been ‘disposed of’ for inheritance tax purposes: upon signing the purchase agreement or only upon closing of the transaction? In its judgement of 12 December 2025 (case no. 3 K 695/24 Erb), the Fiscal Court of Münster has, for the first time, taken a […]
On the recognition of gains in the case of partially compensated transfers of individual assets between business assets
In its ruling of December 11, 2025 (IV R 17/23), the Fourth Senate of the Federal Fiscal Court (BFH) confirmed its previous case law, according to which, pursuant to Section 6(5), sentence 3 of the Income Tax Act (EStG), the transfer of individual business assets between different business assets for partial consideration may also be […]
Non-deductibility of tax advisory fees in connection with the calculation of the capital gain from a disposal of shares
In its ruling of 9 September 2025 (ref. IX R 12/24), the German Federal Fiscal Court (Bundesfinanzhof, BFH) ruled that tax advisory fees incurred while preparing the tax return in connection with calculating the capital gain from the disposal of a shareholding, do not constitute deductible disposal costs as defined by Section 17 para. 2 […]
Gift tax on disproportionate contributions to partnerships
It is not uncommon, especially in family-owned partnerships, for only one partner to make a contribution to the partnership without receiving any consideration in return. In practice, it should not be overlooked that such disproportionate contributions (disquotale Einlagen) may be deemed a gift to the other partners. This article provides an overview of the potential […]
Real estate transfer tax in cases where signing and closing occur at different times
In its decision of 9 July 2025 (Az. II B 13/25), the German Federal Fiscal Court (Bundesfinanzhof – BFH) expressed doubts as to whether real estate transfer tax (Grunderwerbsteuer) may be assessed twice if the signing (entering into the purchase agreement) and closing (transfer of ownership of the shares) of an acquisition of shares in a German limited liability company (GmbH) occur at different times and the tax […]
Supervisory board remuneration – value added tax or not?
For income tax purposes, supervisory board members generate income from self-employment with their activities. Previously, the tax authorities followed this assessment and classified supervisory board members as entrepreneurs, with the result that the remuneration was generally subject to VAT. However, due to recent case law, this view is partly outdated. In the future, it will […]
Taxing a partnership like a corporation – reasonable or not?
Commercial partnerships now have the option of having profits taxed in accordance with the provisions of corporate income tax law. This puts them on an equal level with a GmbH or AG. This so-called option is useful, among other things, if the company’s profits are not to be distributed. On the other hand, the conversion […]
It’s here – the long-awaited real estate transfer tax reform!
In our 2019 | Q2 newsletter we had already addressed the planned real estate transfer tax (RETT) reform which is intended to prevent specific share deal transactions. The legislative process has been on hold since then. However, on 7 May 2021, the corresponding bill has been passed by the Bundesrat. The amendments will enter into […]
Reporting obligations for cross-border tax arrangements – implementation of “DAC 6”
Since 1 July 2020, special reporting obligations apply in Germany for so-called cross-border tax arrangements. These result from the implementation of the European Directive “DAC 6”. Cross-border tax arrangements must be reported to the Federal Central Tax Office within 30 days, otherwise fines may be imposed. The tax administrations of the EU Member States will […]