Germany: Corporate Tax

The Bavarian State Tax Office has issued groundbreaking guidance on hurdle shares, a specialized employee participation instrument featuring negative liquidation preferences. This ruling addresses critical questions about when and how these shares trigger taxable income, distinguishing between the initial issuance and subsequent disposal of shares. The decree provides clarity on whether proceeds constitute employment income or capital gains, potentially reshaping Germany's startup compensation landscape.

Investors in private equity funds pool their capital to acquire equity interests in companies. A fund manager—often a limited liability company (GmbH)—selects, manages, and sells those interests at a profit. In addition to a fixed management fee, the manager receives so-called carried interest (or “Carry”).

The Fiscal Court of Münster has ruled on a critical question in German reorganization tax law: when assessing whether a contribution in kind qualifies for tax-neutral treatment, should authorities examine the circumstances on the actual contribution date or the retroactive tax effective date? This decision challenges longstanding administrative guidance and could fundamentally reshape how businesses structure tax-efficient reorganizations involving partnership interests and special business assets.

Union und SPD haben sich Mittwoch auf einen neuen Koalitionsvertrag geeinigt. Den vollständigen Koalitionsvertrag können Sie hier nachlesen.

Le Conseil d'Etat considère que la mise en place d'actions convertibles inverses accompagnées de divers contrats d'option de vente et d'achat peut être constitutive...

Private equity (PE) funds with at least two German tax resident investors are required to file an annual partnership tax return in Germany, even if they do not have taxable presence in the Germany.

VC-raising through a U.S. entity may result in disclosure of hidden assets.

An intra-group reorganization involving the transfer of shares in a German subsidiary does not constitute a good cause to terminate the fiscal unity.

The German Constitutional Court (Bundesverfassungsgericht) issued a decision in respect to a tax law that had retroactive effect when it was enacted.