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Income Taxes › Germany

Income taxes are taxes that are collected on the individual earnings of persons or entities. Depending on the jurisdiction, income taxes are calculated and collected in a variety of ways. Some tax systems collect... more +
Income taxes are taxes that are collected on the individual earnings of persons or entities. Depending on the jurisdiction, income taxes are calculated and collected in a variety of ways. Some tax systems collect income taxes based on a progressive scheme, while others may utilize a proportional or regressive framework. less -
Morgan Lewis

Federal Fiscal Court Issues Two Rulings on the Requirements for a Consolidated Tax Group for Income Tax Purposes - Legal Insights...

Morgan Lewis on

In two rulings, the Federal Fiscal Court (BFH) ruled in favor of the taxpayer on the requirements for a consolidated tax group for income tax purposes. Managing holding partnership as controlling company (judgment of November...more

Morgan Lewis

Düsseldorf Fiscal Court: Legal and Consulting Fees for Sale of Second-Tier Subsidiary Fully Deductible Irrespective of an Existing...

Morgan Lewis on

In its decision dated February 26, 2025 (7 K 1811/21 K), the Düsseldorf Fiscal Court concluded that legal and consulting fees incurred by the indirect sale of a second-tier subsidiary by the subsidiary are deductible business...more

Morgan Lewis

Federal Fiscal Court on Trade Tax for Commercially Infected Upper-Tier Partnerships - Legal Insights Germany

Morgan Lewis on

The German Federal Fiscal Court (BFH) confirmed its case law according to which the commercial infection of an upper-tier partnership pursuant to Section 15 para. 3 no. 1 sentence 1 alt. 2 German Income Tax Code...more

McDermott Will & Schulte

Economic Ownership of Shares Transferred as Collateral

McDermott Will & Schulte on

Dividends from shares are taxable for shareholders, even if the dividends do not remain with them economically. This (not entirely new) finding can be gleaned from a recent Federal Fiscal Court (BFH) ruling in which the...more

Morrison & Foerster LLP

Koalitionsvertrag 2025 aus steuerrechtlicher Sicht

Morrison & Foerster LLP on

Die Koalitionsgespräche sind abgeschlossen. Wir geben einen ersten Überblick über die gemeinsamen steuerrechtlichen Ziele, die sich CDU/CSU und SPD als Koalitionspartner gesetzt haben. Die Koalitionspartner planen Änderungen...more

International Lawyers Network

Establishing a Business Entity in Germany (Updated)

International Lawyers Network on

Anyone can establish a business in Germany - irrespective of citizenship, nationality, or place of residence. There is no specific investment legislation for foreign entrepreneurs. Any entrepreneur can make his choice...more

Morgan Lewis

German Tax Legislation Before the End of the Legislative Period

Morgan Lewis on

Due to the end of the so-called traffic light coalition and the upcoming new elections in Germany, numerous draft tax bills will not be adopted prior to the end of this legislative period. However, the Annual Tax Act 2024 was...more

DLA Piper

What's New in 2025 for Global Equity Plans

DLA Piper on

As we settle into 2025, companies granting equity compensation awards to their employees around the world are encouraged to monitor developments that affect compliance and administration across different jurisdictions. ...more

Orrick, Herrington & Sutcliffe LLP

Legal Ninja Snapshot: #ESOP & Flips - U.S. ESOPs for Employees of the German Subsidiary Now Available

Orrick, Herrington & Sutcliffe LLP on

Good news! The second chamber (Bundesrat) has now paved the way for the eagerly awaited and much-debated inclusion of a group privilege in sec. 19a of the German Income Tax Act (“EStG”). German start-ups that have done the...more

Orrick, Herrington & Sutcliffe LLP

Employee Participation: Profit Participation Rights (#Genussrechte) – tax attractive alternative to VSOPs?

Orrick, Herrington & Sutcliffe LLP on

Profit participation rights are not yet the first choice for incentivizing employees of an exit-driven startup by allowing them to participate in the future success of the startup. However, they offer a more favorable...more

Orrick, Herrington & Sutcliffe LLP

Legal Ninja Snapshot: #ESOP & Flips — U.S. ESOPs May Become Available for the Employees of the German Subsidiary

Orrick, Herrington & Sutcliffe LLP on

Much has been written about the unsatisfactory tax situation of German employees when it comes to equity-based employee stock (option) programs ("ESOP"). Historically, employees were taxed at the time of issuance of shares...more

Hogan Lovells

Tax treatment of Carried Interest in Germany – Case law confirmed by Federal Tax Court

Hogan Lovells on

The highest German tax court confirmed again its position on the tax treatment of carried interest in a recent decision (docket number VIII R 3/21, decision dated 16 April 2024) published on 18 July 2024. For German income...more

Morgan Lewis

Government Draft of Annual Tax Act 2024 Adopted

Morgan Lewis on

The Federal Cabinet adopted the government draft of an Annual Tax Act 2024 (JStG 2024) on June 5, 2024. The government draft largely corresponds to the draft bill of May 17, 2024 and contains a large number of very different...more

Morgan Lewis

Lack of Regulation on Book Value Transfer Between Partnerships with Identical Shareholdings Unconstitutional

Morgan Lewis on

In its decision dated 28 November 2023 (2 BvL 8/13), the German Federal Constitutional Court (BVerfG) ruled that Sec. 6 Para. 5 Sent. 3 German Income Tax Act (Einkommensteuergesetz, EStG) violates the principle of equality...more

International Lawyers Network

Establishing a Business Entity in Germany (Updated)

International Lawyers Network on

Anyone can establish a business in Germany - irrespective of citizenship, nationality, or place of residence. There is no specific investment legislation for foreign entrepreneurs. Any entrepreneur can make his choice from...more

Orrick, Herrington & Sutcliffe LLP

Zukunftsfinanzierungsgesetz und ESOPs – Wirklich der große Wurf?

Orrick, Herrington & Sutcliffe LLP on

Wichtiger Hinweis: Die folgenden (rechtlichen) Ausführungen dienen nur der allgemeinen Information, sind nicht abschließend und stellen keine rechtliche, steuerrechtliche oder sonstige Beratung dar. ...more

Morgan Lewis

German Parliament Passes Law on Disclosure of Country-by-Country Income Tax Information LEGAL INSIGHTS GERMANY

Morgan Lewis on

The German Parliament passed the law implementing Directive (EU) 2021/2101 with regard to the disclosure of income tax information by certain companies and branches (so-called public country-by-country reporting) on May 11,...more

International Lawyers Network

Establishing a Business Entity in Germany (Updated)

International Lawyers Network on

Anyone can establish a business in Germany - irrespective of citizenship, nationality, or place of residence. There is no specific investment legislation for foreign entrepreneurs. Any entrepreneur can make his choice from...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

Germany’s Energy Price Allowance Payments for Employees - What Employers Need to Know

Ogletree, Deakins, Nash, Smoak & Stewart,... on

Under the new German Tax Relief Act 2022, as of September 1, 2022, employees subject to income tax are entitled to a one-time lump-sum energy price allowance in the amount of €300. The allowance is intended to mitigate the...more

McDermott Will & Schulte

International News: Spotlight on Tax

McDermott Will & Schulte on

INTRODUCTION TO US TAXATION OF NFTS - Despite Non Fungible Token (NFT) sales hitting nearly US$21 billion by the end of 2021, making NFTs almost as valuable as the global art market, they are currently completely ignored...more

International Lawyers Network

Establishing a Business Entity in Germany (Updated)

International Lawyers Network on

Anyone can establish a business in Germany - irrespective of citizenship, nationality, or place of residence. There is no specific investment legislation for foreign entrepreneurs. Any entrepreneur can make his choice from...more

A&O Shearman

Rights granted abroad – Will withholding tax still be due in Germany after all?

A&O Shearman on

For months now the treatment of licence fee income generated in Germany under licence agreements concluded between foreign companies where the right granted is merely listed in a public register in Germany has been causing...more

White & Case LLP

Replacing Pay with Equity to Preserve Cash in a COVID Economy

White & Case LLP on

As pandemic effects linger, companies intent on avoiding layoffs are looking at compensating workers with equity in lieu of cash as part of their pay. In August 2020, the United Kingdom began winding down its Coronavirus...more

K&L Gates LLP

German Act on Tax Incentives for Research and Development (FZulG) in Force

K&L Gates LLP on

The German Act on Tax Incentives for Research and Development became effective 1 January 2020. Under this act, companies and entrepreneurs subject to income or corporation tax in Germany, may apply for subsidies of up to 25%...more

Hogan Lovells

Extraordinary profits created under restructurings according to German law – to be exempt or not to be exempt, that is the...

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Recently the German legislature passed a new law, exempting extraordinary profits created by the waiver of claims under restructurings from income tax liability. ...more

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