Umwandlungssteuerrecht, Gewerbesteueranrechnung, real estate, Umsatzsteuerbefreiungen, Digitale Besteuerung, Anti-Treaty-Shopping-Regelung, R&D, Hinzurechnungsbesteuerung tax credit, cash tax position

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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Coronavirus

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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Entgelttransparenzgesetz, Nachweisrichtlinie

Short-time work in times of crisis

In times of crisis, most recently: COVID-19, companies from particularly affected industries quickly find themselves confronted with the question of how to deal with constant personnel costs in the event of lost revenue. A well proven instrument for coping with this challenge is the instrument of short-time work and the application for short-time work allowance. […]
Investitionsabzugsbetrag BEPS, Country-by-Country-Reporting, Umsatzsteuer, R&D tax credit, CFC rules

CFC rules may violate EU law in cases involving third countries

The German CFC rules have sharp teeth that are often overlooked or underestimated in practice. For one thing, the low-tax threshold is (too) high – currently still 25% – and, for another, the CFC rules even apply to foreign passive investment income (FPII) in mini-shareholdings – from 1% and possibly even less. In EU/EEA cases, […]
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Emittentenleitfaden Ad-hoc-Publizität, Dividendeneinkünfte, Quick Fixes, ATAD, lump-sum taxation, Präferenzregelung

New German lump-sum taxation regime for wages of employees with limited tax liability

On November 22, 2019 the German Bundesrat approved Germany’s Third Bureaucracy Relief Act (Drittes Bürokratieentlastungsgesetz 2019). With this act, the legislature added a subsection 7 to Sec. 40a of the German Income Tax Act (ITA), which allows lump-sum taxation of wage payments to employees with limited tax liability at a rate of 30% from 2020 […]
Gemeinnützigkeitsrecht

Withholding tax on German dividends

The Court of Justice of the European Union (CJEU) recently ruled that German withholding tax on dividends from domestic corporations to nonresident pension funds may restrict the free movement of capital (C-641/17, College Pension Plan of British Columbia v Finanzamt München Abteilung III). Foreign pension funds affected should be able to reclaim German taxes on […]
Gesellschaftsrecht, Genossenschaftsrecht, Kurzarbeit, COVID-19-Pandemie

German transfer pricing case on shareholder loans

The Federal Tax Court’s landmark decision of 27 February 2019 will significantly change the way that the arm’s length principle is applied in Germany. The ruling affects the scope of the term ‘conditions’ in German transfer pricing rules and arm’s length requirements for shareholder loans. This case is of great practical relevance because shareholder loans […]
Vorsteuerabzug Umwandlung, Deutscher Corporate Governance Kodex, ARUG II, Corona-Pandemie

Implementation of new mandatory reporting rules (DAC6) – current status in the EU

On 25 May 2018 the EU Council published a directive amending Directive 2011/16/EU on the automatic exchange of information, which is known as DAC6. The amendment refers to the introduction of a new reporting obligation for cross-border tax arrangements that may potentially be regarded as aggressive and politically undesirable. EU-wide implementation of new mandatory disclosure […]
DAC6

Annual Tax Act 2019 tightens withholding obligation for economic employers in Germany

On November 29 the German Bundesrat approved Germany’s Annual Tax Act 2019 (Gesetz zur weiteren steuerlichen Förderung der Elektromobilität und zur Änderung weiterer steuerlicher Vorschriften “Jahressteuergesetz 2019” – “JStG 2019”). The JStG 2019 tightens the obligation of economic employers to withhold wage tax pursuant to Sec. 38(1) sentence 2 of the German Income Tax Act […]