International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Germany: Tax amendments 2015 finalised


Dieter Endres

After a series of political disputes, the Bundesrat gave its approval to a watered down Bill to change various tax rules on the lines of a traditional tax amendment act. While the amendments are not drastic, the Bill covers the following.

Income Tax Act

An attempt to transpose the ECJ Beker and Beker judgment of December 18, 2013 (case C-168/11) into national law. The ECJ held the present method of calculating the maximum foreign tax credit to be unacceptable because it effectively reduces personal allowances in proportion to the tax-free foreign source income. The amendment does not completely achieve its object because of a drafting error. Further legislative action is to be expected.

The employee outing tax-free allowance of €110 per head has been retained, but now includes the venue costs as well as the costs of consumption. The main effect is to complicate the administrative burden on employers.

Foreign Tax Act

The profit correction provision has been amended to remove all foreign/domestic considerations from third-party comparisons. This follows from attempts to deny the validity of an unfavourable third-party comparison because one of the parties to it was a local resident.


Managing portfolio investments on behalf of customers is henceforth a taxable transaction in Germany when performed for a customer in a non-member state of the EU. This responds to an unsuccessful attempt to claim the contrary before the ECJ.

Other changes

In the same session the Bundesrat gave its approval to provisions for less generous treatment of tax evaders coming forward. The restriction follows from improved methods of detection.

Open issues

Proposals that have not been passed, but which remain on the agenda – for 2015 or later – include:

  • a prohibition of a business expense deduction for an outlay that has been or will be deducted abroad. This is primarily intended to counter hybrid financing schemes;

  • taxation of the capital gains of companies from the sale of portfolio shareholdings. This demand of the Bundesrat reflects that body's view of a capital gain as a direct substitute for a dividend;

  • an extension of the intra-group exemption from the loss forfeiture rules for share transfers between related parties; and

  • the abolition of tax-free share exchanges to the extent of a cash balancing payment.

Dieter Endres (

PwC Frankfurt

Tel +49 69 9585 6232


more across site & bottom lb ros

More from across our site

Bartosz Doroszuk of MDDP offers insights on Poland’s new tax legislation on shifted profits, as the implementation deadline looms nearer.
Four tax specialists preview the UK’s transfer pricing requirements, which come into effect on April 1.
The rise of the QDMTT will likely change how countries compete on tax and transfer pricing policy, but it may not reverse decades of falling corporate tax rates.
ITR’s latest quarterly PDF is going live today, leading on the EU’s BEFIT initiative and wider tax reforms in the bloc.
COVID-19 and an overworked HMRC may have created the ‘perfect storm’ for reduced prosecutions, according to tax professionals.
Participants in the consultation on the UN secretary-general’s report into international tax cooperation are divided – some believe UN-led structures are the way forward, while others want to improve existing ones. Ralph Cunningham reports.
The German government unveils plans to implement pillar two, while EY is reportedly still divided over ‘Project Everest’.
With the M&A market booming, ITR has partnered with correspondents from firms around the globe to provide a guide to the deal structures being employed and tax authorities' responses.
Xing Hu, partner at Hui Ye Law Firm in Shanghai, looks at the implications of the US Uyghur Forced Labor Protection Act for TP comparability analysis of China.
Karl Berlin talks to Josh White about meeting the Fair Tax standard, the changing burden of country-by-country reporting, and how windfall taxes may hit renewable energy.