Umsatzsteuer Umsatzsteuerbefreiung, Datenschutzstrafrecht, Rollover relief, Forschungszulage, Familienprivileg, Related Party Transactions, Coronavirus, Gesellschaftsregister, Freiberufler, Verlust, Ausscheiden, CbCR, Revised Administrative Guidance, Transfer Pricing Documentation, German Administrative Guidance

Revised Administrative Guidance on Transfer Pricing and Tax Audits

Transfer pricing and the documentation of arm’s-length transfer prices are closely scrutinized and often disputed in tax audits. Germany has had administrative guidance in place since 2005, specifying German taxpayers’ obligations during a tax audit. On December 3, 2020, the German Ministry of Finance published a revision of this guidance, now known as the ‘Administrative […]
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Umwandlungssteuerrecht, Gewerbesteueranrechnung, real estate, Umsatzsteuerbefreiungen, Digitale Besteuerung, Anti-Treaty-Shopping-Regelung, R&D, Hinzurechnungsbesteuerung tax credit, cash tax position, tax policy, Steuerentlastung, Jahressteuergesetz 2020, wirtschaftliches Eigentum, German-UK income tax treaty

Amendment of the German-UK income tax treaty

On January 12, 2021, amendments to the protocol in the German-UK income tax treaty were signed. The key points of the amendment of the German-UK income tax treaty are the introduction of a new provision in targeting treaty abuse; and the revision of the permanent establishment standard by introducing the anti-fragmentation rule. Global businesses need […]
Streitbeilegungsrichtlinie, EU-Kommission, EU, Feste Niederlassung,Online-Handel, Öffentlich-öffentliche Zusammenarbeit

German draft law for modernization of withholding taxes relief and new anti-abuse measures

On 20 November 2020, the Federal Ministry of Finance issued the draft for a law on the modernization of the relief from withholding taxes (“Abzugsteuerentlastungsmodernisierungsgesetz – AbzStEntModG”). Changes have been proposed for the following tax rules in particular: procedure to obtain relief from German withholding taxes (“WHT”) on the basis of income tax treaties or […]
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Investitionsabzugsbetrag BEPS, Country-by-Country-Reporting, Umsatzsteuer, R&D tax credit, CFC rules, EU Steuer, umsatzsteuerliche Organschaft, Hinzurechnungsbesteuerung, Werklieferungen, work supplies, Hinzurechnungsbesteuerung, Vorsteuerabzug von Kommunen

German Federal Ministry of Finance on work supplies (‘Werklieferungen‘)

In a letter dated October 1, 2020, the German Federal Ministry of Finance (‘BMF’) clarified that a work supply requires that an object not owned by the supplier is treated or processed. The BMF supplemented the VAT Application Decree accordingly. Work supplies Hence, a work supply is only given, if the manufacturer of the work […]
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Gemeinnützigkeitsrecht

New German tax court case about the fixed establishment concept for VAT purposes

The German Federal Tax Court issued a decision on a ‘fixed establishment’ for VAT purposes (ECLI:DE:BFH:2020:U.290420.XIR3.18.0). The case concerned a German business consultant who provides services in third countries on behalf of non-business customers. The question was whether an office building and employee, which have been made available to the consultant during his business trips abroad, […]
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The National Hydrogen Strategy: a step towards a hydrogen economy?

In its fight against climate change, the German cabinet has approved a National Hydrogen Strategy. Adopted on 10 June 2020, it marks a new milestone in establishing a German economy primarily powered by hydrogen. This follows on from the federal government’s National Hydrogen and Fuel Cell Technology Innovation Programme and Energy Research Programme. This all […]
Cash Pooling Fehlerbegriff Enforcement-Verfahren, Vat rates

Reduction of VAT rates in Germany between 1 July and 31 December 2020: Clarifications and simplifications at a glance

The German government surprisingly announced to reduce VAT rates for six months from 19% to 16% and 7% to 5%, respectively. This is pleasing consumers. However, it presents entrepreneurs with enormous challenges. Nearly all trade associations have criticised that the reduction of VAT rates is far too short-term. At the same time, they have called […]
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Umwandlungssteuerrecht, Gewerbesteueranrechnung, real estate, Umsatzsteuerbefreiungen, Digitale Besteuerung, Anti-Treaty-Shopping-Regelung, R&D, Hinzurechnungsbesteuerung tax credit, cash tax position, tax policy, Steuerentlastung, Jahressteuergesetz 2020, wirtschaftliches Eigentum, German-UK income tax treaty

Announced tax policy measures – what German businesses need to know

On June 3, the German government announced a €130bn fiscal package designed to boost the country’s economic recovery from the Covid-19 crisis. A total of 57 detailed policy measures are included, consisting of tax reliefs, direct financial aids, a reduction of levies, measures to increase investments in new technologies and a cap for social security […]
Coronavirus, Vorstandsvergütung

Update: Immediate tax measures to take account for effects of Coronavirus

The Coronavirus pandemic (COVID-19/SARS-CoV-2) poses fundamental medical, but also economic challenges for the entire world. According to the German Federal Government’s package of measures dated 13 March 2020, tax measures should be made possible to avoid undue hardship in an unbureaucratic manner. This is being implemented by the Federal Ministry of Finance, along with the […]
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Umwandlungssteuerrecht, Gewerbesteueranrechnung, real estate, Umsatzsteuerbefreiungen, Digitale Besteuerung, Anti-Treaty-Shopping-Regelung, R&D, Hinzurechnungsbesteuerung tax credit, cash tax position, tax policy, Steuerentlastung, Jahressteuergesetz 2020, wirtschaftliches Eigentum, German-UK income tax treaty

How to protect your cash tax position during the COVID-19 pandemic

While headlines are dominated by the global drop in stocks, the debt market (i.e. loans, bonds) is now being exposed to great risks. The new coronavirus outbreak has almost shut down the markets for newly issued debts, meaning debt sources are being ever more depleted. This, while companies need cash injections more than ever. For […]
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