Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 10/2/2012

Germany - Proposals to simplify tax-group rules, expand NOL carrybacks 

October 2:  The German government introduced a draft act to modify and simplify business taxation. Among the provisions are measure intended to:
  • Simplify the income tax rules for tax groups—with measures concerning “defective profit transfer” and loss absorption, and place of management of a controlling entity or controlled company
  • Increase net operating loss (NOL) carrybacks to €1 million (up from €511,500)
  • Simplify and provide uniform rules for travel expenses

Completion of the legislative process on these proposals is expected by the end of 2012.


Read an October 2012 report [PDF 110 KB] prepared by the KPMG member firm in Germany: German Tax Monthly (October 2012)


Other items addressed in this KPMG report concern:


  • A federal tax court (Bundesfinanzhof—BFH) decision on the qualification of “interest on equity,” which is allowed under Brazilian law (i.e., a Brazilian company may, in certain situations, decide to pay a limited amount of interest on equity, and can deduct the interest on equity off-balance sheet to reduce taxable income)
  • Administrative guideline from the Frankfurt/Main regional tax office providing no EBITDA carryforward in case of net interest income under the earnings stripping rules
  • Provisions for future tax audits for large businesses



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