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Germany: Bundesrat opinion on tax rules; loss utilization, treaty-override developments

Germany: Bundesrat opinion on tax rules

The KPMG member firm in Germany has prepared a report that summarizes the following recent tax developments:


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  • The Bundesrat issued its opinion concerning measures for the implementation of EU administrative assistance directive and to address base erosion and profit shifting (BEPS). The opinion concerns a new rule to prevent double deductions of special business expenses in the event of transactions with a foreign nexus; new rules regarding the non-resident tax liability for gains on the sale of shareholdings in real estate corporations; the trade tax treatment of the imputed income amount under the CFC rules; the trade tax treatment of non-portfolio dividends of a controlled company in a tax group; the interpretation of the tax treaty principle of dealing at arm's length; and a deemed dividend distribution in the event of cross-border mergers. The Bundesrat did not provide an opinion on other measures including country-by-country reporting.
  • The government published a draft bill relating to loss utilization for tax purposes.
  • The federal tax court (BFH) decided that the treaty-override provisions apply in instances when an income tax treaty entered into force and was effective at a time subsequent to the tax rule. 
  • A tax court case from Lower Munster concerns whether a loss carryback is possible even if there is a detrimental change in ownership. 
  • A decision of the tax court of Lower Cologne concludes that payments in the context of a computer-based travel reservation system are not subject to trade tax add-backs.


Read a 2016 report [PDF 385 KB] prepared by the KPMG member firm in Germany: German Tax Monthly

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