, Limited? – consequences of Brexit on limited companies with administrative headquarters in Germany
On 29 March 2019 the United Kingdom’s membership in the EU will expire. As a result, companies under the legal form of a Ltd. with administrative headquarters in Germany will lose their freedom of establishment and will no longer be recognized as legal entity in Germany. This could, however, be subject to a transition period […]
Planned duty of disclosure for tax arrangements
On 25 May 2018, the ECOFIN Council, consisting of the Ministers of Economics and Finance, passed the Directive (EU) 2018/822 amending Directive 2011/16/EU on the mandatory automatic exchange of information in the field of taxation on relation to reportable cross-border arrangements. This is intended to create an obligation to report potentially aggressive tax-planning arrangements. The […]
Restructuring clause – ECJ declares aid decision null and void
A change of shareholder can lead to a proportional or complete elimination of the existing losses of a company. However, this shall not apply if the acquisition of the investment is made with the aim of restructuring the company. Up to now, however, the EU Commission has regarded this so-called restructuring clause as state aid. […]
Real estate transfer tax reform with respect to share deals
On 8th September 2016, the federal states of Hesse, North Rhine-Westphalia and Schleswig-Holstein decided to implement a working group with respect to an intended reform of the real estate transfer tax. The reform targets to close down loopholes with respect to structures which are considered abusive regarding the sale of company shares which (mainly) hold […]
Evergreen: holding companies and input tax deduction
There is hardly another topic which is monitored in tax audits as closely as the entitlement to input tax deduction for holding companies. The following article illustrates what has to be taken into account and shows which possibilities in terms of structure may potentially arise for the companies concerned.
A final default of a shareholder loan must be taken into account as a loss on income from capital assets – this is what shareholders should consider in the future
The Federal Court of Finance [Bundesfinanzhof – BFH] passed an interesting decision (file no. VIII R 13/15), regarding the decision of the BFH (file no. IX R 36/15) in Q4: Accordingly, the final default of a loan leads to a loss recognized for tax purposes which must be taken into account on income from capital […]
Gift tax on hidden profit distributions – double burden of income and gift tax?
Notwithstanding an earlier statement, the Federal Fiscal Court [Bundesfinanzhof – BFH] decided in three rulings that excessive payments of remuneration by a limited liability company [Gesellschaft mit beschränkter Haftung – GmbH] to an affiliated person of a shareholder are to be recorded for income but not for gift tax purposes. Nevertheless, a double tax burden […]
Wage? – new case law on management participation programs
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) […]
Loss of procedural capacity of a private company limited by shares sued in Germany
By order of 19 January 2017 (file reference: VII ZR 112/14), the Federal Court of Justice [Bundesgerichtshof – BGH] declared a private company limited by shares sued in Germany which was removed from the companies register in England (foundation state) incapable of being a party to proceedings. The order also gives occasion to analyze the […]
Possibilities of legal protection in regard to simultaneous tax audits
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 […]