German Tax Package 2004: A Summary
Mondaq Business Briefing › Germany Law Articles in English (2004)
Linked as:
Extract
German Tax Package 2004: A Summary
By Joachim Borggäfe, Dr. Thomas A. Jesch, Andreas Köster-Böckenförde, Dr. Andreas Striegel, Martin Weger and Dr. Matthias Kestler
Effective January 1, 2004, the German Tax Legislation has been amended. For foreign investors, the tightened thin capitalization rules are certainly the most important changes. First, the debt : equity ratio for qualified holding companies is reduced to a ratio of 1.5 : 1. Also, the "thin cap" rules apply to partnerships held by corporations. In the future, interest will no longer be deductible in full if the interest expense relates to an intercompany loan received in connection with a share purchase from a related party.Other measures include restrictions on loss utilization, dividend taxation being brought into line with the Bosal decision of the European Court of Justice, and capital gains being taxed the same way as dividends.For VAT purposes, strict formal rules will apply in resp...See the full content of this document
Sponsored links
