ESG and Tax in the context of PE transactions

Recent public discussions emphasise the importance of tax as a criterion when considering environmental, social and governance (ESG) factors in investment and management decisions. Policymakers in and outside Europe already use tax policy and tax transparency regulations to achieve environmental policy and sustainability goals. In the context of Private Equity, a company’s approach to tax […]
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Pension fund

Tax Court of Munich on Withholding Tax Regime for Portfolio Dividends

In a recently published judgment of 6 December 2021, the Tax Court of Munich decided that the final German withholding tax (WHT) on German dividends to a Canadian pension fund does not violate the free movement of capital under Article 63 TFEU as pension provisions were not formed at the fund’s level. Relevant German legislation […]
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NPO

Cross-border transfer of funds to foreign NPOs

In our new blog series, we are looking at how foreign and internationally active non-profit organizations (NPOs) can benefit from the tax privileges NPOs in Germany have. This is part three and deals with cross-border fund transfers between NPOs. German charity law permits the cross-border transfer of funds between non-profit organizations (NPOs) for charitable purposes. […]
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withhold tax

No withholding tax deduction for software developed abroad in the future? – New circular from the Federal Ministry of Finance expected

German clients have to deduct withholding tax from their payments to foreign software developers German companies that conclude contracts with software developers abroad may be subject to a tax deduction under Sec. 50a(1) no. 3 German Income Tax Act. The tax must be collected from persons subject to limited tax liability (individual developers or companies […]
Unternehmenskauf

VAT deduction right of PropCos located abroad owning/exploiting German real estate – VAT changes

In its decision C-931/19 (“Titanium”), the Court of Justice of the European Union (“CJEU”) ruled that a foreign company should not be considered as having a fixed establishment for VAT purposes („FE“) in a Member State if its activity in that country is limited to the ownership and the exploitation of real estate without having […]
Coronavirus, Vorstandsvergütung, Insurance Premium Tax, German Administrative Guidance, Umlaufverfahren

New Administrative Guidance on German Insurance Premium Taxes

Multinational groups often take out international insurance policies to provide group-wide cover against their worldwide risk exposure. Normally, a master policy is taken out by the parent, supplemented by local policies for the local subsidiaries. These companies should therefore be aware of an amendment to the German Insurance Tax Act (VersStG) passed on December 10, […]
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Betriebsstätten

Naturalization and Article 116 of the German Constitution

Previously, the number of applications for naturalization on the basis of Article 116(2), first sentence, in the German Constitution was somewhat modest. However, applications have grown significantly within the few last years. Requests from the United Kingdom, for example, have increased nearly tenfold – highly probably due to the results of the 2016 EU Referendum. […]
Umsatzsteuersätze

Federal Ministry of Finance locks third-country taxable persons out of applying the TOMS regime (special regulation for travel agents, in acc. with Art. 306 EU VAT-Directive)

Germany’s Federal Ministry of Finance has been examining the taxation of travel services performed by companies based in third countries. In a letter issued on January 29, 2021 (bundesfinanzministerium.de), the ministry states that the special scheme for travel agents (Sec. 25 of the German VAT Act – UStG) will no longer be applicable if the […]