No inheritance tax exemption for an independent, undeveloped plot of land next to the family home
In its ruling of 5 April 2018, the Munich Finance Court decided that the exemption from inheritance tax for family homes does not apply to an undeveloped, in terms of land register law independent plot of land, which adjoins the family home, even if the two plots of land form an economic unit. The appeal […]
The tax-privileged sale of freelance practices – BFH on the application of preferential rates in the case of (marginal) continuation of freelance activity
In a recent decision, the Federal Court of Finance (BFH) specifies the criteria according to which, after the sale of a freelance practice, the resumption of the freelance activity within the previous local sphere of activity is not detrimental to the tax privileges of the capital gains realized on the sale.
Not without my daughter! On the design of succession clauses in company agreements (of partnerships)
In its decision of 24 January 2019 the Vienna Supreme Court [Oberster Gerichtshof – OGH] determined for the first time that so-called gender clauses in the company agreements of commercial partnerships are unethical and thus void because they violate the principle of equality guaranteed under constitutional law. The decision issued under Austrian law is considered […]
LOSS OF SHAREHOLDER LOANS – TAX-RELEVANT OR NOT?
The tax recognition of losses from shareholder loans has significantly changed over the past few years. While the Federal Court of Finance [Bundesfinanzhof – BFH] initially assumed that such losses could be partially deducted as subsequent acquisition costs if certain conditions were met, it allowed full deduction from capital income in 2017 with two judgments. […]
Caution: insolvency contestability in the case of deferring claims from exchange agreements in intra-group relations
In a recently published judgment (default judgment of 11 July 2019 – case no. IX ZR 210/19), the Insolvency Senate of the Federal Court of Justice [Bundesgerichtshof – BGH] affirmed that the practice of deferring claims arising from intra-group exchange contracts, which is quite common in many groups, is contestable under insolvency law – which, […]
Pool agreements – how to overcome the inheritance tax hurdle of 25%!
Shares in corporations, except shares in non-member States, are granted tax concessions for inheritance and gift tax purposes if the testator or the donor directly held more than 25 % of the nominal capital of a company. The threshold of 25 % also applies to the question of whether so-called administrative assets are involved. Pool […]
Useful regulations in an entrepreneur’s last will
Securing the preservation of the company, maintaining family peace and protecting the economic hedging of all family members – in order to achieve these goals, an entrepreneur should deal with succession plans at an early stage and should not rely on the statutory provisions on succession. When drafting the articles of association and then also […]
Planned real estate transfer tax reform – finally, it’s getting concrete!
In our newsletter 2018 | Q3, we have already addressed the planned Real Estate Transfer Tax (RETT) reform, with which it is intended to “plug loopholes” for structures identified as abusive in the context of a transfer of company shares. The reform’s key points are the lowering of the threshold, the extension of retention periods […]
Hopeful start of loss deduction for corporations
By resolution of 29 March 2017 the Federal Constitutional Court [Bundesverfassungsgericht – BVerfG] decided that the proportionate forfeiture of tax losses pursuant to section 8c para. 1 sentence 1 German Corporation Tax Act [Körperschaftsteuergesetz – KStG] old version is unconstitutional and called on the legislator to pass new regulations by 31 December 2018 which should […]
No aid character of tax benefits under Section 6a RETTA
Finally, the European Court of Justice (ECJ) clarified the situation with its judgment of 19 December 2018 on the “group clause” relating to real estate transfer tax: the tax relief pursuant to section 6a German Real Estate Transfer Tax Act (RETTA) is not an illicit aid within the meaning of Art. 107 TFEU, since this […]