Business confidence in Germany is at an all-time low. The business climate index, as surveyed by the Munich-based Ifo Institute, has reached the lowest result measured since the survey began in 1991. Even worse is that, according to Ifo’s president Hans W. Sinn, the bottom of the downturn has not yet been reached. That’s the bad part of the news.

Here comes the good news: Continue →

The Emirate of Abu Dhabi has acquired a 9.1 % stake in the German carmaker Daimler, thereby becoming its largest shareholder and joining Kuwait, which already owns a 6.9 % stake.

After the purchase was announced, Daimler’s shares promptly rose 7% on the German stock market. Other auto industry shares also benefited from the market’s good mood brought on by the deal. Last week it was further rumored that Arabian investors might purchase up to 25 % of Daimler and further takeovers of Daimler or other carmakers therefore seem possible. Abu Dhabi invested through its public joint stock company Aabar Investments PJSC, which is headquartered in Abu Dhabi and is listed on the Abu Dhabi Securities Exchange. While carmakers are said to be one of the first groups to benefit from an economic upturn, Aabar noted that it was looking for a long-term investment.

The German legislature recently issued an amended revised draft of the “Act to Combat Destructive Tax Practices and Tax Fraud”.

Amongst others the draft act imposes the following sanctions on states which do not comply with the OECD standards of transparency and exchange of information requirements:

• the tax exemption for intercompany dividends may be denied;
• the deduction of business expenses related to offshore business transactions may be denied.

Contrary to the first draft from January 2009 Continue →

So-called “short-time” work is “en vogue” in Germany with even large companies such as Infineon, Daimler and Siemens making use of it. Short-time work is a state-sponsored program which allows companies to reduce the working hours of their employees with the shortfall in wages being paid by the employment office. The program is designed to prevent companies which are facing temporary economic difficulties from laying off large numbers of workers. While this program has been available for a number of years, the sheer amount of companies currently using the benefits of the program is staggering: In just a few short months, the amount of short-time workers in Germany has already reached the peak level of the 1990s. Continue →

On 9 December 2008, the German Federal Constitutional Court held the 2007 restriction of the commuter tax allowance to be unconstitutional. Continue →

In the case under consideration, the German plaintiff ran supermarkets near the Polish border. From 1993 to 1998, a time before Poland became an EU member, several Polish citizens simulated purchases and exports by collecting sales receipts left in the plaintiff’s shopping carts and waste paper baskets near the supermarkets. By using falsified forms and toll stamps, they tampered with export verifications, provided the documents with the names and address of Polish citizens and applied for and were granted VAT refunds by the plaintiff. Continue →

On 2 February 2009, the Regional Tax Authority of Bavaria, an intermediary authority between the Bavarian Finance Ministry and the local Bavarian tax offices, announced that as of 1 January 2009, the tax office of Neubrandenburg in Mecklenburg, Western Pomerania is centrally competent for the determination of income taxation for non-resident recipients of German annuities and pension benefits. Continue →