Hinzurechnungsbesteuerung, Indirekte Steuern, Umsatzsteuerrecht

German Annual Tax Act 2019 – What does it mean for VAT?

Annual Tax Bill 2019 transposes quick fixes into German law and amends many VAT rules

The draft of the German Annual Tax Act 2019 (JStG 2019) contains many amendments to VAT law. These amendments primarily transpose EU legislation into German law. One focus of the JStG 2019 is the transposition of ‘quick fixes’ – new provisions affecting the entire intra-Community movement of goods. The draft introduces numerous other less conspicuous […]
RETT Grunderwerbsteuer Share Deal

Real estate transfer tax reform in share deals

Draft bill on RETT proposes significant tightening of the law

The German legislature has long been considering a tightening of real estate transfer tax (RETT) law on the transfer of shares in business entities owning real estate (share deals). The Ministry of Finance published a draft bill on May 8, 2019. The main aspects of the planned reform are: Relevant holding threshold of RETT prerequisites […]
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Joint Audits in Germany

Competent Tax Court has again ruled in favor of instigating a Joint Audit against taxpayer’s will

Joint Audits have been enjoying increasing popularity for some time now in Europe. German tax authorities promote them as an effective means of clarifying the facts of cross-border cases and avoiding double taxation. Evidence of the fact that taxpayers do not always approve of coordinated tax audits may be taken from the procedures before the […]
Transfer Pricing, Real Estate

German Tax Court Decides on Exemption of Real Estate Income from Trade Taxes

Extended exemption of income from trade taxes will be applied more often

The German market for real estate remains highly attractive to investors. An increasing number is acquiring shares in foreign and/or domestic companies which own real estate in Germany. In many cases a later share deal offers several advantages for investors selling real estate, such as opportunities to avoid German real estate transfer taxes. Investments in […]
Geoblocking, Geoblocking-Verordnung

Online Advertising Fees not subject to German Withholding Tax

German tax authorities officially reject recent tax audit trend. Significant impact on the tax position of nonresident companies offering online advertising services in Germany could be avoided.

Online advertising is booming thanks to global digitization. In a number of recent German tax audits, tax inspectors have treated payments as withholding tax-inducing royalties if made by German companies to nonresidents offering online advertising services. According to these auditors, cross-border payments are made for the use of undisclosed know-how. Consequently, the auditors applied the withholding […]
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Geoblocking, Geoblocking-Verordnung

Follow up: Tax Authorities’ About-turn: No Withholding Tax Obligation on Fees for Online Advertising

No additional tax burdens for domestic advertisers

The Bavarian finance minister, Albert Füracker, from the state’s Ministry of Finance and Home Affairs stated: „At Bavaria’s instigation, it has been possible to reach clarification on a national federal level. It is now finally clear that domestic companies do not have to withhold tax on online advertising.“ One of the justifications for this is […]
Geoblocking, Geoblocking-Verordnung

Some German Tax Auditors Apply Withholding Tax on Fees for Online Advertising

A recent tax audit trend in Germany has the potential to significantly impact the tax position of both German companies which use online advertising and nonresident companies offering online advertising services in Germany.

Alarming audit trend in Germany German tax auditors have recently started to treat payments made by German companies to nonresidents offering online advertising services as royalties. In the auditors’ view, cross-border payments are made for the use of undisclosed know-how in the form of advertising algorithms. Although the auditors justify this practice by the application […]
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Grunderwerbsteuer Entstrickung, wohnsitz Steuerrecht

New Taxation for Nonresidents Selling Real Estate

Changes in German tax law affect foreign-to-foreign transactions – significant impact on nonresidents

The German real estate market remains highly attractive to foreign investors. An increasing number are structuring their acquisition of shares in foreign companies that own real estate in Germany, sometimes through interposed companies. A share deal offers several advantages for nonresidents selling real estate. For instance, there are some opportunities to avoid the German real estate […]

New Mandatory Reporting of Cross-Border Tax Arrangements

New Reporting Obligation for Taxpayers and Intermediaries – Draft of German Ministry of Finance Expected

As of 25 May 2018 the EU Council has published directives amending Directive 2011/16/EU regarding the automatic exchange of information. The amendment refers to the introduction of a new reporting obligation regarding cross-border tax arrangements. The member-states are to enact laws to this effect by 31 December 2019 resulting in a reporting obligation from 1 […]
Gesellschaftsrecht, Genossenschaftsrecht

New taxation of foreign investments in German real estate

Changes in German tax law expected - significant impact on foreigners investing in German real estate

The German real estate market is still buoyant, attracting a significant number of foreign investors. Recently, it has been possible to observe realizing profits and streamlining portfolios. More and more foreign investors are structuring the acquisition of shares in foreign companies owning German real estate (share deal), sometimes via interposed German companies, rather than by […]