Germany: Loan interest in cross-border triangular cases

Germany: Loan interest in cross-border triangular cases

The KPMG member firm in Germany has prepared a report that briefly describes the following tax developments:

  • Waiver of loan interest in cross-border triangular cases—the German Federal Tax Court (BFH) decided that according to the wording of § 1 (1) AStG, an income correction in connection with a constructive dividend has no primacy.

  • Advance profit payment for management at a partnership—the BFH decided that the advance profit payment made to the general partner in form of a German limited liability company (Komplementär-GmbH) for the assumption of management of a limited partnership (KG) can be attributed to the limited partner as special remuneration if the latter provides management as managing director of the GmbH.

  • Transfer of an asset to a partnership—the Lower Saxony Lower Tax Court decided that a transaction against payment is only assumed for the transfer of an asset in exchange for partners' rights to the extent that the equivalent value of the asset increases the fixed capital.

Read an October 2020 report [PDF 332 KB] prepared by the KPMG member firm in Germany

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