Tax Planning During GmbH Crisis: Debt Waiver with Recovery Note and Loss Carryback—A Real-World Case Study Many growth- and research-intensive companies face the same problem in their early years: high development expenses, consistently negative results, and financing primarily through shareholder loans. The following anonymized case study of a German GmbH with a foreign parent company illustrates the income tax implications […]
Business Succession: Planning Under the Sword of Damocles of the German High Court Ruling (BVerfG) The inheritance and gift tax benefits under Sections 13a and 13b of the German Inheritance Tax Act (ErbStG) have for years been among the key tools for tax-optimized business succession. At the same time, ensuring a seamless business succession has become increasingly complex, as these […]
Reporting unreported profits—and suddenly exempt from trade tax? In this example, a GmbH retroactively reported transactions that increased its profits to the tax office. In the course of this audit, it became apparent that the GmbH meets the requirements for trade tax exemption under Section 3(13) of the Trade Tax Act (GewStG) (e.g., healthcare professions, clinics, or educational institutions with […]
Relocating accounting operations abroad: regulations and how to avoid penalties German regulations on the relocation of electronic invoicing have become more flexible in recent years. Companies can now maintain and manage electronic books and records not only within the EU/EEA, but also in other countries, provided that the legal requirements are met. These include countries such as the USA, Switzerland […]
§13a Inheritance Tax Act 2026: Business succession – between tax relief and constitutional risk Business succession is not only a matter of family, leadership, and strategy, but also a key tax decision. Section 13a of the German Inheritance Tax Act (ErbStG) can significantly reduce the tax burden on business assets in the event of inheritance or a gift—provided that the […]
Inheritance in Germany: allowances for less inheritance tax Usually, anyone who experiences a death in the family also deals with inheritance. In Germany, inheritance is subject to tax. However, there are allowances that vary depending on the degree of relatedness and the amount of the inheritance. These allowances make it possible to pay less levy. This article explains the various […]
Inheritance and gift tax Germany: all you need to know Inheritances and gifts with a foreign link are becoming more common, including implications on inheritance and gift tax in Germany. This occurs when someone involved in the process resides in another country. Transferring assets in a different country can also cause this to happen. For example, this could include a […]
The introduction of the One-Stop-Shop (OSS) process on July 1, 2021, has brought numerous benefits to German e-commerce companies. Nevertheless, practical application shows that e-commerce companies that use sales platforms such as eBay for their sales are confronted with significant hidden risks when creating outgoing invoices. These risks often only come to light during a tax audit. Background If a […]
Entrepreneurs are allowed to deduct input VAT if business events do not serve purely private needs but are related to business activities. Input VAT deduction for attentions depends on the overall activity. The input VAT deduction requires a direct and immediate connection between input and output turnover. If the connection exists with taxable output transactions, the deduction is possible. If […]
The EU authorizes Germany to introduce electronic invoicing (e-invoicing) for certain transactions as early as January 01, 2025, before it becomes mandatory throughout the EU. Germany had submitted an application on November 10, 2022, which has now been approved. The bill is to be limited to B2B sales for now and will be addressed in the Growth Opportunity Act legislative […]
