Highlights from the 2009 Corporate Tax Protocol

In the recently published Corporation Tax Protocol 2009, the tax authorities have set out their views on selected issues. Some are briefly presented below.

• Partial value adjustment of non-interest-bearing intra-group loans: if a parent company grants an interest-free loan to its subsidiary, this is a Social relationship motivated. An expense recognised in the annual financial statements Devaluation of the loan (due to the lack of interest) is again in the tax plus-minus calculation (MWR) Undo to do. Tax-wise, the devalued amount to the extent of the devalued amount represents a tax-neutral contribution forward.
• Share buy-back the purchase of own shares on the stock exchange with a later sale is, from a German income tax perspective, considered Acquisition and disposal transaction to be seen. If a profit arises, this is subject to corporate tax. The statements made in BMF decrees regarding the acquisition for the purpose of collecting shares, which is Deposit refund are represented in the purchase and sale case Not to apply.
• Grant of Stock Options: senior employees are sometimes granted the opportunity to acquire shares on preferential terms under certain conditions. If the shares are thereby in the manner of a Conditional capital increase be issued, this will lead to the dilution of existing shareholders. If the value of the granted options in the annual financial statements is Personnel expenses was was was has been recorded, has been recorded in the tax MWR again Undo to do, as the granting of share options (as well as the subsequent issue by way of conditional capital increase) leads to the company no outlet leads.
• Group holding and intermediate capital companyIn practice, it is common for the board of directors of a subsidiary to be employed by the parent company. Subsidiary contribution to the board activities Remuneration to die Mother. This constellation is no Use case for remuneration for highly personal services, which, according to Rz 104 of the EStR, are attributable to the person personally performing the service since 1.7.2009. Since, in the case of a group company, the Employment relationship of the board Not if a „subsidiary“ (i.e. a company within the sphere of influence of the management) exists and the provision is made in the interest of the parent company, None Direct Attribution all payments to the board.
• Fair rent for letting to a corporate body: When an outsourced company rents out a building to its parent entity (e.g., a municipality) under non-arm's length conditions, this can be a hidden profit distribution portray. If, in addition to the (insufficient) rental income, the company also has other (corporation tax liable) Grants from The Parish received, these can – irrespective of their VAT treatment – when assessing whether a generally commonplace remuneration is present, will be taken into account. If rent and grants together one appropriate remuneration arises, lies None hidden profit distribution.

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