Germany’s Federal Fiscal Court (BFH) has decided on the legitimacy of double assessment of real estate transfer tax in share deals.
Tax authorities have taken the view that the acquisition of at least 90% of shares in a German real estate holding company can be subject to real estate transfer tax (RETT) twice: Once at signing against the purchaser based on the acquisition of the shares, and again at closing against the real estate holding company based on the transfer of at least 90% of the shares to the new shareholder.
While the tax authorities have refrained from a (final) double assessment of RETT under certain conditions (e.g., simultaneous signing and closing, or a formal taxpayer request), this is only granted if all RETT-relevant notifications (of the signing and the closing event) are submitted completely and on time (typically within two weeks).
In a recent interim ruling on 9 July 2025, the BFH expressed serious doubts regarding the double assessment of RETT in such cases. The court granted a suspension of enforcement of the RETT assessment in the context of preliminary proceedings in the case, suggesting that RETT should potentially only be levied once, and only against the property-holding company, even if signing and closing occur at different times or RETT notifications were flawed or missing. However, a decision on the case in the main proceedings is still pending.
Key takeaway: This case signals a possible shift toward a more taxpayer-friendly interpretation of RETT in share deals. Nevertheless, it remains crucial to submit all RETT-relevant notifications in a timely and accurate manner to avoid unnecessary disputes with the tax authorities.
