Tax treatment of company events

Staff and management can get together for the annual company outing, the Christmas party or also an…

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Transfer pricing rules for financing transactions

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Working abroad - Tax equalisation and tax protection in the new ‘183-day circular’

During a period of working abroad, employers and employees normally conclude tax equalisation agreements. The…

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Sustainability reporting - A step-by-step guide

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Accounting treatment of the purchase of receivables at below their nominal value in the case of restructuring

If a partner has purchased a receivable against the company at below its nominal value and subsequently waives…

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Artificial intelligence in M&A transactions - Impacts on the due diligence process

Artificial intelligence (AI) is also increasingly being used in corporate transactions. In the following…

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Damage caused by pruning on a neighbouring property can lead to compensation

In disputes between neighbours illegal pruning of plants is punishable by heavy fines. The amount of…

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E-invoicing will be mandatory from 1.1.2025 – Urgent action is required by all companies

Ever since the promulgation of the German Growth Opportunities Act on 27.3.2024 it has been clear that…

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Draft bill for the 2024 Annual Tax Act

While it was only recently, in March 2024, that the German Growth Opportunities Act was passed, now already,…

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The relocation of production abroad - What are the tax implications that need to be considered?

The relocation of production abroad is no longer a possible scenario solely for large corporate groups. Rising…

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Sustainability reporting - A step-by-step guide

The first two parts of our series of articles on sustainability reporting provided a comprehensive overview of…

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The shareholders’ meeting - It is imperative that the heirs are invited

When a shareholder dies many legal issues often arise. This applies to the holding of shareholders’ meetings,…

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The Bundesrat has approved the German Digital Act - E-prescription & E-patient record

In the course of the digitalisation of the healthcare system, an electronic prescription service (in German:…

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Request for information - A violation of the GDPR would not already constitute a basis for claiming compensation

Thanks to the General Data Protection Regulation (GDPR), employees have the right to seek information from…

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Too high a VAT amount stated on invoices to final consumers – The new regulations

Up to now, under Section 14c (1) of the VAT Act (Umsatzsteuergesetz, UstG), businesses have been obliged to…

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Private real estate sales in the context of succession cases and own-use

Recently, a number of new court rulings with respect to private sales transactions involving real estate were…

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Company rescue via a bridge loan and/or a reorganisation loan

The distinction between a bridge loan and a reorganisation loan plays a fundamental role in business…

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Sustainability reporting - A step-by-step guide

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Sale of partnership interests – Earn-out payments only have to be taxed when they are received

When stakes in a partnership are sold, besides a fixed purchase price, the contracting parties sometimes also…

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Travel regulations – Poolside sun loungers that are constantly reserved could constitute defective performance

Recently, the Hanover District Court had to rule on the consequences of a dispute at a hotel pool. The subject…

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German Growth Opportunities Act ‘lite’ - What has remained?

In the following section we provide an overview of the amendments made to the Growth Opportunities Act within…

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Sustainability reporting - A step-by-step guide

The EU passed the so-called Corporate Sustainability Reporting Directive (CSRD) with a view to improving and…

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AI in the workplace - The risks call for guidelines and operational instructions

The chatbot ChatGPT was launched by OpenAI, a US American company, in November 2022. Since then, such…

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‘No Russia clause’ – Western sanctions and the need for action by companies

On 26.2.2024 and previously on 18.12.2023, EU member states agreed on packages of further sanctions (no. 13…

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Liability of executive bodies - Limits via the allocation of responsibilities

The liability of the executive bodies of corporations is a matter that routinely keeps the courts busy. Where…

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Online Banking - Bank statements should be regularly backed up

These days, bank transactions are being performed more and more frequently via smartphones or PCs. Admittedly,…

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No VAT on students’ cake sales

From 2025, Germany’s public sector will also be generally subject to VAT. This will affect, among others,…

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Consumer protection - Button for online cancellation must be easily recognisable

Even though it is understandable that companies usually want to hold on to their customers for as long as…

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Protection against the loss of tax revenues caused by cross-border arrangements

The different tax treatment of a situation in two disparate states can lead to the creation of structures that…

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Changes related to electricity tax relief from 2024

Through the 2024 German Budget Financing Act, which came into force on 1.1.2024, lawmakers approved changes…

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Real estate tax – Subsequent determination of assessed value and updating the value

Real estate owners had until 31.1.2023 to submit a real estate tax return as at the date of the main…

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Tax-neutral transfers between affiliated partnerships

Section 6(5) sentence 3 of the Income Tax Act (Einkommenssteuergesetz, EStG) legally specifies that in the…

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Measuring goodwill in times of inflation and a turnaround in interest rates

Against a background of persistent inflation and higher interest rates, the question of the real value of the…

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Employee shares – Changes due to the German Future Financing Act

Many employers try to create motivation and retention incentives for employees via attractive remuneration…

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Dismissal on the grounds of time fraud is possible even after unlawful data evaluation

The General Data Protection Regulation (GDPR) specifies, among other things, how video surveillance has to be…

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Determination of profit – Requirements for the recognition of deferred income

The Federal Fiscal Court (Bundesfinanzhof, BFH) recently considered the criteria for creating a deferred…

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Moving house for a better home office – Relocation costs could be tax deductible

During the COVID-19 pandemic, many professionals with small homes realised that as a result of working from…

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Discounting a purchase price paid in instalments – Interest and income from capital assets

When an item that forms part of private assets is sold and the claim for payment of the purchase price is…

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New clarifications with respect to transfer pricing

Federal Fiscal Court (Bundesfinanzhof, BFH) rulings on transfer pricing issues are rare and, therefore,…

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Tax planning by means of a usufruct in favour of children

The transfer of a source of income to (under-age) children via the establishment of a gratuitous usufruct has…

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Large-scale project planning – the construction of a logistics centre

Bei der Planung eines Großprojekts – wie dem Bau eines Logistikzentrums – treten neben bautechnischen und…

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German Whistleblower Protection Act – Reporting channel is required where there are at least 50 employees

On 17.12.2023, the statutory provisions in the Whistleblower Protection Act (Hinweisgeberschutzgesetz,…

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Expansion of the scope of the German Act on Corporate Due Diligence Obligations in Supply Chains

The Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz, LkSG),…

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Maintaining two households – Costs for a parking space included in the accommodation costs?

If the place of residence and the place of work are far apart from each other it sometimes makes sense to rent…

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Documentary evidence of arrival for intra-Community deliveries – Using the EMCS procedure

Under the German VAT Implementing Ordinance, a business owner can provide documentary evidence of the arrival…

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Non-sequential invoice numbers could justify estimates of additional income

If the place of residence and the place of work are far Invoice numbers generally have to be assigned…

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Five-year period and three properties limit – Criteria for commercial trading in property

When a property is purchased and sold shortly afterwards this could give rise to a taxable capital gain. If…

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Introduction of a ‘plastic tax’ from 2024

Single-use plastic products that have been improperly disposed of constitute a notable source of environmental…

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Large-scale project planning – the construction of a logistics centre

When planning large-scale projects - such as the construction of a logistics centre -, besides structural…

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M&A in times of crisis – Current trends and challenges in respect of corporate transactions

A pandemic, war and inflation – over the past months, these crises and the resulting effects have severely…

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Implementation of ESG standards at DAX companies

The adoption of the Corporate Sustainability Reporting Directive (CSRD) and its specification in the European…

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Shareholders’/Partners’ information and control rights

Minority shareholders/partners, in particular, and/or shareholders/partners not authorised to manage a company…

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Netflix and Spotify – Price-adjustment clauses are ineffective

In their terms and conditions of use, streaming services such as Netflix and Spotify have granted themselves…

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Government funding and tax breaks for electric vehicles from 2024 – an overview

In 2024, the German government will continue to make funds available for electromobility, although the level…

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EU Commission presents SME Relief Package

Small and medium-sized enterprises (SMEs) are a key driver of Europe’s green and digital transitions. For this…

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Payroll tax deductions when staff are deployed across borders

In the global workplace, and against the backdrop of the current worldwide skills shortage, staff are…

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Taxation of free-float dividends

Dividend income or profit distributions that a corporation receives from its shareholding in another…

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Acquisition of the family home – Extent of inheritance tax concession under review

In accordance with the provision of Section 13(1) no. 4c sentence 1 of the Inheritance Tax Act…

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Monetary policies of central banks as a key factor affecting business financing

High inflation rates are currently hampering economies overall throughout the world. In Germany, the inflation…

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New requirements for the audit of IT systems in accordance with ISA DE 315

The requirements of a new auditing standard are creating challenges for auditors and therefore, indirectly,…

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Business intelligence solutions for enhanced business process monitoring

In the present digital era, businesses are generating vast amounts of data that provide valuable insights and…

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House sale following a divorce – Transferring half a property can release speculative gains

Recently, the Federal Fiscal Court (Bundesfinanzhof, BFH) decided that a taxable private capital gain is…

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The German Growth Opportunities Act – Improvements of loss deduction and depreciation options

On 30.8.2023, the Federal Cabinet approved a government draft of the Growth Opportunities Act…

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Workroom at home vs. home office blanket allowance

The tax deductibility of the costs and blanket allowances, respectively, for a workroom at home and a home…

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Environmental, social and governance (ESG) policies in the context of employment law

The inclusion of sustainability criteria is becoming increasingly important. Within the scope of a business…

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New forms of working – ‘Remote Work’ and the ‘Workation’ (Part II: Important aspects of tax and social security law)

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A tenant’s entitlement to reimbursement under the German Carbon Dioxide Cost Allocation Act

The Carbon Dioxide Cost Allocation Act (Kohlendioxidkostenaufteilungsgesetz, CO²KostAufG) has introduced an…

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Workplace health promotion in the fitness studio

Under Section 3 no. 34 of the German Income Tax Act, employers are able to provide an attractive benefit to…

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Major changes to international tax law as of 1.1.2024

The Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) published a draft omnibus act…

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E-invoicing in Germany – Preparations are required

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Determining ‘fair’ business value – Adjustments for heightened uncertainty

Business valuation already previously frequently resulted in arguments about the ‘correct’ or ‘fair’ value. In…

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New forms of working – ‘Remote Work’ and the ‘Workation’ (Part I)

Advances in technology have made it possible for employees in various professional fields to work remotely –…

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The modernisation of German partnership law – A need to review the GbR and other partnerships

The Act on the Modernisation of Partnership Law (Gesetz zur Modernisierung des Personengesellschaftsrechts,…

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Is living space illegally repurposed when it is used by holidaymakers?

When rental apartments are rented out via online portals there is a risk that the actual use of the living…

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Shorter useful life – How faster tax depreciation of real estate can be achieved

Fixed tax depreciation rates based on standardised useful lives mean that real estate users have only limited…

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Reciprocal sales – Rotating holdings at below their value will not be recognised for tax purposes

Tax saving potential cannot be generated by rotating the holdings of two shareholders in a GmbH [German…

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Update on trade tax add-backs of rental and lease payments

In recent years, trade tax add-backs have frequently been the subject of disputes between taxpayers and the…

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E-charging stations – Accounting for their acquisition and maintenance by companies

In the course of the energy transition process, electromobility is being encouraged in a number of ways. It…

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ESG reporting – Measuring non-financial performance on the basis of the Women’s Career Index (Frauen-Karriere-Index, FKI)

While, in the past, sales revenue and profit were regarded as the sole criteria for economic success, these…

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German Whistleblower Protection Act has entered into force

The ‘Act for better protection of whistleblowers as well as for the transposition of the EU directive on the…

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Green Claims – EU criteria against greenwashing and misleading environmental claims

On 22.3.2023, the EU Commission presented a draft directive on common criteria against greenwashing and…

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Workplace health promotion in the fitness studio

Employers are able to provide an attractive benefit to their employees in the form of tax-free payments for…

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Increased tax-exempt amount for vocational training – How parents can reduce their tax burden

When children are studying or undertaking vocational training their parents frequently help them out…

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New ruling on exit tax by the Bundesfinanzhof

Under the German Foreign Transactions Tax Act, exit tax has to be paid by those who hold substantial stakes in…

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Beware the tax trap in the case of share deals

The fundamental changes to the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz, GrEStG) are now…

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Sale of properties held as private assets – Recognise and avoid the tax pitfalls

Capital gains on personal property are not generally subject to income tax. Even the capital gain on a…

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Compensation payments made to tenants as immediately deductible expenses

According to a ruling recently issued by the Federal Fiscal Court (Bundesfinanzhof, BFH), payments made to…

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Taxation in Germany of remuneration from abroad

If an employee residing in Germany works abroad then the question that arises is if and to what extent the…

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Building assets with ETFs in an asset management GmbH [limited liability company] as opposed to private assets (Part 2)

Zinseszinseffekte während des Vermögensaufbaus werden maßgeblich durch Steuerwirkungen beeinflusst. Hier liegt…

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Employee bonuses where there is no legal entitlement – A provision is nevertheless possible

A provision for liabilities of uncertain timing or amount presupposes, among other things, that payment is…

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The decision to disclaim an inheritance should not be taken lightly

Disclaiming an inheritance is a move that could be considered not merely where the aim is to avoid personal…

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Usufruct of a benefit as abusive structuring?

When usufruct agreements are made between, in particular, parents and their (under-age) children, disputes…

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Pension commitments – No provision where there are harmful reservations

The requirements for creating a provision within the meaning of Section 6a of the Income Tax Act…

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Attempted coercion – No right to ‘safely store’ an improperly parked e-scooter

Parisians recently voted to clear e-scooters from their city’s streets in the future. In Germany, by contrast,…

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Withholding tax for construction services and its tax risks for businesses, lessors & Co.

The German fiscal administration recently revised its approx. 20-year-old circular on the application of…

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Developments as regards German tax groups for VAT purposes

We have had no less than two rulings on German tax groups for VAT purposes within a short space of time. For…

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Relief provided by the energy price brakes

The German government introduced ‘energy price brakes’ in response to the sharp increases in energy prices and…

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Building private assets with ETFs during a period of rising interest rates

The effects of compound interest while building assets are mainly impacted by the tax implications. This…

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First ruling on COVID-19 compensation

Since 2020, employers have been able to apply for compensation for the loss of earnings incurred by employees…

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The list of shareholders of a GmbH – A potential source of succession problems

In the business sphere, a death could pose an existential threat, particularly if there has been no structured…

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A managing director’s liability after leaving the executive board?

If a GmbH [private limited company] ceases to comply with certain obligations, such as, e.g., transferring the…

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Where would a financial settlement be taxed following a move to a foreign country?

When a move to a foreign country follows the termination of an employment relationship a question that arises…

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Tax-reducing provision for age-related free time

Businesses that give their employees additional days off from work in the form of age-related free time can…

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New conditions for the adjustment of an invoice where the VAT is incorrectly stated

The ECJ has stated its position on a request from Austria for a preliminary ruling. This ruling is also…

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VAT in the Digital Age – Implications of digitalisation for the VAT system in the EU

On 8.12.2022, as part of its VAT in the Digital Age (ViDA) initiative, the EU Commission published a…

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Per country limitation when claiming foreign tax credit

Under German tax law, the crediting of foreign taxes against German corporation tax constitutes one of the…

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New standards for cash register systems – What operators of cash register systems will have to consider in the future

Since 1.1.2020, businesses have had to comply with the new legal provisions of the Cash Register…

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Equal pay for equal work

In a pivotal ruling, the Federal Labour Court decided that a woman may claim the same remuneration as her male…

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Act to Transpose the EU Directive on Cross-Border Conversions – An overview

The Directive (EU) 2019/2121 (Directive on Cross-Border Conversions) had to be transposed into national law by…

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Employer’s obligation to assume the costs for spectacles worn while working in front of screens

In a recent case, the ECJ had to rule on whether or not an employee would have to accept their employer’s…

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New build rental apartments – Special depreciation allowance of 5% per year will be re-introduced

To encourage the new construction of rental apartments, in 2019 already, German lawmakers introduced a special…

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New model form for supplies of goods for export in cases of handling and processing

The Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) has published a new model form for a…

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Treating fees as pass-through expenses

An expense will be deemed to be a pass-through expense if the business that collects and disburses such…

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Modernisation of external tax audits – Few advantages and extensively expanded obligations

In recent years, various measures have been taken in respect of external tax audits or tax audits (TA), which…

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New reporting obligations for digital platform operators

The so-called Platform Tax Transparency Act (Platt­formen-­Steuertransparenzgesetz, PStTG) has been in force…

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Changes to the German Valuation Act – Hidden inheritance tax rises due to increased property values?

Changes to the Valuation Act (Bewertungsgesetz, BewG) came into force together with the 2022 Annual Tax Act…

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Disposal of a business in return for a pension – Right to choose between immediate taxation and inflow taxation

According to a German supreme court ruling, those who dispose of their businesses and, in return, allow…

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How high inflation impacts financial reporting according to HGB and IFRS

In 2022, inflation accelerated markedly around the world. In view of the large number of significant…

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Data abuse fears – Claims for damages after scraping?

The General Data Protection Regulation (GDPR) brought a lot of uncertainties in its wake, but above all the…

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The German tax group for VAT purposes is in need of reform – Landmark ECJ judgements

Two referrals by the Federal Fiscal Court (Bundes­finanzhof, BFH) brought before the ECJ the question as to…

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The multi-tier group – Which is the controlling company and which is the dependent company?

In the event of intra-group restructuring, under certain conditions, it is possible to avoid real estate…

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Current accounts – Continued use does not constitute automatic consent to the new GTCs

Many banks and Sparkassen [savings banks] have been trying for months to enforce their new terms and…

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Changes in the taxation rules applicable to photovoltaic systems – Part II – VAT treatment

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Determining customs values for transactions between affiliated companies – Are subsequent adjustments allowed?

In the case of transactions between affiliated companies, the fiscal administration likes to presume that…

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Recognition for tax purposes of the costs of studying abroad

A course of study in a foreign country usually entails additional costs. Whether or not and to what extent the…

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Voluntary capital contributions to increase the amount of loss relief in the case of partnerships

In the case of partnerships, a partner may normally deduct losses, for tax purposes, solely up to the amount…

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Recognition of an agreement as an invoice – Current ECJ requirements

The ECJ has expressed its view on the question of whether or not an agreement may be regarded as an invoice…

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Application of International Standards on Auditing (ISA) in Germany

The auditing standards of the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer, IDW)…

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Recording working hours – The Federal Labour Court has clarified key points

In 2019 already, the ECJ decided that Member States would have to adopt national legislation that would oblige…

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Receipt of e-mails within the scope of business dealings – This could be a matter of minutes

These days, correspondence between companies mainly takes place via e-mail. However, you should be aware that…

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German Real Estate Transfer Tax – Notification of a unification of shares

Real estate transfer tax (RETT) is payable not just on property acquisitions. It can also arise if, for…

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Refurbishment expenses that can be immediately deducted after withdrawal of a residential property

If extensive maintenance and modernisation measures are carried out at rental properties within three years of…

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Changes in the taxation rules applicable to photovoltaic systems – Part I – Income tax treatment

In some German federal states, the installation of photovoltaic (PV) systems on all new non-residential…

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Introduction of a levy to skim off windfall profits for quantities of electricity generated from renewable energy sources

The war in Ukraine has resulted in enormous upheavals on European energy markets. In the course of this, some…

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Provisions for bonus points – New recognition requirement for many businesses

A great number of businesses – even smaller ones, such as, pharmacies or bakeries – use bonus point systems or…

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The digital legacy – What happens with data after death?

Our lives are increasingly shifting into digital spaces; here, passwords protect access to personal services…

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Tax-exempt sale of property – Self-use in the year in which the sale takes place is essential

If property that is held in private assets is sold before the end of the ten-year speculation period then the…

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Actual implementation of a profit transfer agreement in a consolidated tax group

According to settled case law, a profit transfer agreement (PTA) would only have actually been implemented if…

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Employers only have to remunerate mandatory or approved overtime

Overtime is only paid out if the employer is aware of the additional work that has been performed. In cases of…

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Dealers’ guarantee commitments – Insurance premium tax treatment and VAT treatment

The Tax Law Committee of the German Association of Tax Advisers (Deutscher Steuerberaterverband e.V., DStV)…

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Social security – Thresholds for 2023

Parity financing of health insurance contributions was reintroduced in 2019 and will likewise continue for…

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