More than 23.500 tax evaders have voluntarily disclosed having evaded taxes to the fiscal authorities over the course of the last year.
On December, 24th 2010 newspaper „Die Welt“ quoted a poll with the Ministry of Finance and the regional tax offices of the federal states indicating that Baden-Württemberg alone received an impressive number of 7.409 self-reportings. Continue →
Companies operating in more than one Member State in the European Union still have to face various tax obstacles.
The European Commission believes that these obstacles can only be overcome in a systematic way by providing companies with a consolidated corporate tax base for their EU-wide activities.
Amongst others, the Commission´s Directorate-General responsible for Taxation and the Customs Union is currently working on the common consolidated tax base (CCCTB) Continue →
The Federal Constitutional Court of Germany (Bundesverfassungsgericht, BVerfG) decreed with its November 9th Decision which was published on November 30th that the initial moment of suspicion needed for a search warrant could be provided on the basis of data sold to the Federal Republic of Germany by a Liechtenstein informer.
The constitutional complaint is against the issuing of a search warrant in the preliminary proceedings of a tax evasion case. The appellants were being investigated under the suspicion of tax evasion in the assessment periods 2002-2006.
The district court of Bochum issued the search warrant in question. Continue →
On November 26th 2010 the Bundesrat (Federal Council) approved the 2010 Annual Tax Act (Jahressteuergesetz 2010, JStG 2010).
The JStG 2010 serves the implementation of a number of individual regulations in many different areas of tax law. Among these, the following regulations stand out:
With a decree published on November 9th 2010, the Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) made public that the so called “E-Bilanz” will be delayed by one year.
In light of the law on modernizing and lowering bureaucracy in tax proceedings (Steuerbürokratieabbaugesetz) from the 20th of December 2008, §5b Income Tax Act (Einkommensteuergesetz, EStB) was introduced, which obligates corporations to submit their financial statements electronically (E-Bilanz). According to the law, beginning in 2011 corporations are thus obligated to use this E-Bilanz as well as the electronic submission of profit and loss statements together with their tax statements for the submission to the fiscal authorities. Within the parameters of this law, the Federal Ministry of Finance was authorized to decree the minimum extent of the data which is to be submitted. Continue →
On November 1st 2010, the Finance Court Cologne published its decision passed on September 8th, in which it held that the fiscal authority may not impose the stay of execution of a tax bill upon the taxpayer solely for the purpose of acquiring an interest advantage for the state.
The decision is based on a case in which the plaintiff had to make additional payments of several million Euros after a tax audit. The plaintiff paid in due time, but appealed to the tax office on the matter of the changed tax bills. The tax office thereafter suspended the execution and refunded the additional tax paid without the plaintiff’s explicit request. Continue →
As the Federal Ministry of Finance declared in a press release published on November 27th 2010, Federal Council of Switzerland, Hans-Rudolf-Merz and German Federal Minister of Finance Wolfgang Schäuble signed a bilateral declaration to enter into tax negotiations between Germany and Switzerland. During the meeting in Bern, the ministers also signed the revised double taxation agreement (DTA) complying with OECD standards. With their signatures, both Merz and Schäuble emphasized their nation’s intention to deepen the cooperation in questions of finance and taxation and to strengthen legal certainty in the long run.
In signing the bilateral agreement, Merz and Schäuble agreed to start negotiations on an expansion of transnational collaboration in tax questions and the improvement of market access for banks. These negotiations will be based on the previous exploratory talks which a joint task force led in the preceding months. Continue →
Following the example of three other federal states, Brandenburg is now planning to increase the real estate transfer tax rate from 3.5% to 5%.
As a result of the intended legislative project, Brandenburg is calculating an increase in its tax revenue of about 37.5m € due to the new tax rate, the main part of which Continue →
The European commission has formally requested a revision of Germany’s tax regulations, since they, according to the commission, are discriminating. The point of critique in this instance is that losses of non-German group companies cannot be offset against their profits within the group. If the commission does not receive a satisfying answer in the course of the next two months, it can appeal to the European Court of Justice.
Under German law, a company set up in accordance with the company law of any other member state, which has its registered office outside Germany and place of effective management in Germany, cannot benefit from the fiscal unity regime (Organschaft) which is available to German companies, although said company is fully taxable in Germany. Therefore the company cannot enjoy the tax benefits resulting from the allocation of the group company’s income to the parent company (offsetting of profits and losses within the fiscal unity). Such provisions are considered to be discriminatory in comparison to domestic competitors and may restrict the freedom of establishment of businesses in Germany. It should be underlined that this case does not deal with the question of cross-border loss compensation.
Germany’s reaction to this situation remains to be seen.
With its decision from the 8th of September 2010, published on September 23rd, the German Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) decided that the petition for judiciary review of the Solidarity Surcharge (Solidaritätszuschlag) charged in 2007 which was filed by the Financial Court (FG) of Lower Saxony is inadmissible. The Financial Court’s claim that the solidarity surcharge is unconstitutional due to it having the singular purpose of providing temporary coverage of financial requirements was ruled invalid - the reason being that the Financial Court did not adequately analyze the previous case law on the nature of supplementary taxation.
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