Good news – especially for foreign executives living in Germany!

According to a legislative initiative of the Second Chamber of the German Parliament (Bundesrat), consulting expenses incurred in regard to a taxpayer’s individual tax return will once again be deductible. The new regulation will be part of the so-called Citizen Relief Law (“Bürgerentlastungsgesetz”) which was initially intended to Continue →

The German president, Horst Köhler, has been re-elected for a second five-year term. The 66-year-old Köhler, a former director of the International Monetary Fund, obtained 613 of the 1,223 ballots cast by the Federal Assembly (the parliamentary body that elects the German head of state), which is the minimum required for re-election. The Financial Times called the re-election a symbolic victory for chancellor Angela Merkel, since she is to launch her own re-election bid in only four months.

The election is, however, not without a certain aftertaste: Continue →

While Germans have always been seen as big complainers, this appears to be changing somewhat: despite bad economic news, Germans are remaining optimistic. This is reflected in the latest “economic sentiment index” survey of the Mannheim based ZEW Institute which measures attitude and outlook rather than hard business facts.

According to this survey Continue →

Germany’s economic freefall has come to an end. According to the latest industry and export data, exports rose 0.7 % in March, representing the first month-to-month increase since September 2008, even though economists had expected a further decline. However, economists expect first-quarter German gross domestic product figures, due out next week, to show a quarter-to-quarter contraction of as much as 3.5 %, the Financial Times reports.

While the economic decline hit Germany harder than other industrial countries due to its strong dependence on exports Continue →

The reunion of the Porsche and Piëch families must have been no picnic. The two cousins Wolfgang Porsche, chairman of Porsche, and Ferdinand Piëch, chairman of Volkswagen have already clashed over how to bail out Porsche before and their disagreements are likely to continue.

The Porsche clan, which owns a larger piece of Porsche than the Piëch clan, was backing the plan of Porsche CEO Wendelin Wiedeking to merge Continue →

The following article was published in the IBFDs “Bulletin for International Taxation” (Vol. 63, Number 4, 2009), written by Peter H. Dehnen and Stanley C. Ruchelman. The authors dedicate it to their friend and colleague, Joseph H. Guttentag, on the occasion of his 80th birthday in recognition of a lifetime of public service.

Summary

The 2006 protocol to the 1989 tax treaty and protocol between Germany and the United States amended both the treaty and the protocol. The 2006 protocol provides for mandatory arbitration if certain conditions are satisfied. In December 2008, the competent authorities of Germany and the United States signed a Memorandum of Understanding which deals with requests for competent authority assistance and arbitration. It is published in I.R.S. Announcement 2008-124, and guidelines supplementing the Memorandum of Understanding are published in I.R.S. Announcement 2008-125. This article provides an overview of the substantive and procedural provisions for mandatory arbitration in the 2006 protocol and the Memorandum of Understanding.

Read the complete article.