Tax Amendment Act 2023 - Draft Bill Published

At the end of April 2023, the Tax Amendment Act 2023 was published in the draft review stage. Selected aspects will be presented in an overview below.

• The use of vacant commercial buildings for purposes other than business (e.g., residential use) is to be facilitated by tax relief, particularly to curb land sealing. The background is that buildings previously used for business but no longer required for operations – despite being vacant – have often remained in business assets to avoid the taxation of buildings upon withdrawal. Now, the withdrawal of buildings from business assets – as is already the case with the withdrawal of land – is to take place at book value instead of market value. The building relief for business disposals and cessation of business under Section 24(6) of the Income Tax Act (EStG) will then consequently be abolished.
• The modernisation of technical processes also extends to the taxation of capital assets, by replacing the previously analogue capital gains tax exemption declaration with fully electronic data transmission between withholding credit institutions and the tax authorities ("Digital Exemption Declaration").
• The draft expert report also contains statements on cryptocurrencies in the business sphere. If income from staking, airdrops, bounties, and hard forks accrues in the business sphere, it should also not be taxed at the point of accrual, but only upon subsequent sale. Furthermore, it should be ensured that the exchange of one cryptocurrency for another cryptocurrency does not lead to immediate taxation, even in the business sphere.
• There are to be clarifications and simplifications regarding the small business lump-sum taxation for income tax purposes. Small business lump-sum taxation generally requires that the exemption from turnover tax for small businesses pursuant to Section 6 (1) sentence 1 no. 27 of the Turnover Tax Act (UStG) is applicable. However, if the small business regulation for turnover tax is not applicable because another "de facto" exemption from turnover tax takes precedence, the small business lump-sum taxation for income tax purposes could not be claimed in these cases so far (doctors or building society and insurance agents are affected by this, for example). In the future, it will be permissible if a more specific "de facto" exemption from turnover tax takes precedence over the small business exemption - the small business lump-sum taxation for income tax can then still be used.

We will keep you updated on the further legislative process.

Image: © Adobe Stock - Robert Kneschke