Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/31/2012

Germany - Valuation on tax balance sheet; tax treaty updates  

August 31:  An opinion of the regional tax office (OFD) Muenster provides that the value stated in a taxpayer’s financial balance sheet is also to be used for tax balance sheet purposes.

German tax law provides that assets (including liabilities) on the tax balance sheet must comply with the “principle of linkage”—i.e., assets must be carried in the same value in both the financial (commercial) balance sheet and the tax balance sheet. There are exceptions to this rule, especially regarding provisions for non-cash obligations (which allow for some discounting).


The OFD opinion clarifies that the value stated in the financial balance sheet controls for tax balance sheet purposes. This opinion is expected to be applied by all tax authorities.


Read a September 2012 report [PDF 88 KB] prepared by the KPMG member firm in Germany: German Tax Monthly (September 2012)


Other topics discussed include:


  • A report of a court case concerning application of an income tax treaty’s participation exemption privilege to an S corporation
  • A court case concerning the sale of “special business property” and the effect of an income tax treaty
  • A report concerning the entry into force of the new Germany-Turkey income tax treaty



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