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:
- Non-taxability of sales of objects of daily use (adaption of case law into regulation)
- Determinations in the area of residential services: Excerption of certain public aided measures from tax deductions
- Simplifications and corrections with regard to withholding tax on capital gains Continue →
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 →
The Swedish energy group Vattenfall recently announced it would invest about €1 billion ($ 1.4 bil.) along with Germany’ Stadtwerke München in a 80-turbine offshore wind farm in the North Sea.
The building of the site is supposed to start in 2012 and be completed in 2014. The wind farm will be located some 70 kilometers (43 miles) off the German island of Sylt, near Denmark. With a set capacity of 288 megawatts - enough power to supply 500.000 households - the farms is one of the main offshore projects in the world. “Dan Tysk” - so the name of the joint venture - will be held at 51% by state-owned Vattenfall, and at 49% by Stadtwerke München. 80 wind turbines will be delivered by the German Siemens Energy AG.
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Sixt, one of Europe’s largest car rental and leasing companies, will expand their range of products in the years to come. Mark Thielenhaus, board member of the Sixt Leasing AG, announced that the company will add up to 100 electric vehicles to their leasing fleet by the end of this year. The cars that will contribute to the Full-Service Leasing branch of the company will be manufactured by German E-Cars, a subsidiary company of the automotive supplier Fräger, located in west-central Germany.
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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 →
Stuttgart 21, a multibillion railway and urban-redevelopment project is going ahead in Stuttgart, despite the fact that it offers hardly any benefits for the German rail network and that the money would be better spent on other, more promising projects.
It is the aim of the controversial project, to eliminate the biggest bottleneck on the high-speed route from Paris to Bratislava. A tunnel system and new highs-speed trains are supposed to create a high-speed rail connection throughout Europe. Beside the facts that the 13 hour train ride from Paris to Bratislava can not at all be competitive with air travel, and that for example the improvement of the railway between Stuttgart and Paris would be a more promising and significantly cheaper project, two other reasons for opposition are prominent these days in Germany: Trees, and money.
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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.
This Sunday, on October 3rd, Germany celebrates the 20th anniversary of its reunification. On this occasion, the German government issued a survey focusing on citizens of the former German Democratic Republic (GDR). The answer to the question of how the former citizens of the communist republic would judge their lives in the GDR in retrospect, is a surprising one: 57% of East Germans evaluate their lives in the GDR as absolutely or mostly positive.
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