Germany: Implementation of Amendments to EU Mutual Assistance Directive
Amendments to the EU Mutual Assistance Directive and other measures against BEPS were implemented. Published in the Official Gazette, this bill implementing the amendments contains an amendment to the provision under the Income Tax Act. This deals with a transfer of fixed business assets or substantial (at least 1%) interests in corporate entities which have been transferred to a domestic partnership to a foreign company or individual before June 29, 2013, without taxation of the capital gains taking place at that time.
The German Tax Authority will tax any gains realized on a subsequent transfer of such assets or interest concerned by the foreign acquirer, subject to the following conditions:
- If Germany lost its taxing rights with respect to such capital gains
- Those taxing rights were restricted before January 1, 2017
This provision shall also be applicable if Germany has no taxing rights under a tax treaty.