Global

Details

  • Service: Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 9/28/2012

Germany - Inheritance and gift tax referred to CJEU 

September 28:  The European Commission this week announced it has referred Germany to the Court of Justice of the European Union (CJEU) with respect to German inheritance and gift tax allowances.

Under German law, a tax exemption of €500,000 (depending on the degree of kinship) is available for German residents on inheritances and gifts whereas the exemption is only €2,000 if both the testator and the heir are not residents of Germany. Thus, the taxation of non-residents is much higher on inherited assets located in Germany than is the taxation imposed on German residents who inherit assets in Germany.


The CJEU issued a judgment in April 2010 (the Mattner case (C-510/08)) finding that this allowance provision was contrary to the free movement of capital. After the EC issued a reasoned opinion, Germany amended its inheritance and gift tax law in December 2011, to provide that non-residents could, upon request, be treated in Germany as tax residents for purposes of inheritance and gift tax.


According to an EC release (IP/12/1018, 27 September 2012), the EC found that this option to request to be treated as a German tax resident does not eliminate the infringement.




©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to go-fmtaxnewsflash@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now

Contact us