Germany: Accounting for liabilities, under subordination agreement

Germany: Accounting for liabilities

In a case concerning accounting for liabilities of a subordination agreement, the federal tax court (BFH) held that a liability may not be recognized in the balance sheet if, according to the subordination agreement, the liability is to be repaid only out of a future balance sheet profit-and-liquidation proceeds, if any.

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Read an August 2015 report prepared by the KPMG member firm in Germany: German Tax Monthly (August 2015)


Other topics discussed in this KPMG report concern the following developments:

  • The Federal Ministry of Finance (BMF) issued guidance on the realization of profits in the case of installments paid under contracts for work.
  • A new income tax treaty between Germany and Japan was initialed, and is pending signature.
  • The BMF published an updated version of the taxonomy Version 5.4.

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