Tax and Legal 7-2022

Dear Sir or Madam

As part of a realignment of our information services, we have also developed new formats for news@bdo. In the future, we will inform you about our weekly Tax & Legal UPDATE instead of the previous news@bdo Steuern & Recht (Tax & Legal). For you as a reader of Steuern & Recht (Tax & Legal), nothing will change; you will automatically receive the Tax & Legal UPDATE and will thus always be up to date on all important tax matters.

In our current and last issue of Steuern & Recht (Tax & Legal), we would like to present a variety of court decisions. For example, in its rulings of December 1, 2022, the European Court of Justice determined the fundamental compatibility of the German regulation on VAT fiscal unity with the VAT Directive. In addition, we have, as usual, evaluated the current case law of the German Federal Fiscal Court and the fiscal courts of first instance and prepared a compact version for you.

We would like to thank you for your interest in our information and wish you a Merry Christmas and a healthy and successful year 2023.

Your BDO

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FOR ALL TAXPAYERS

Annual Tax Act 2022

We present the most important legislative changes introduced by the Annual Tax Act 2022.

FOR TRADERS AND FREELANCERS

Reclassification of losses from commercial activities

In its ruling of June 30, 2022 (Case No. IV R 42/19), the German Federal Fiscal Court decided that losses from a commercial activity exceeding the so-called marginal limit do not preclude a reclassification of the otherwise asset-managing activity of a civil law partnership.

Provision for obligations from customer loyalty programme

In its ruling of September 29, 2022 (Case No. IV R 20/19), the German Federal Fiscal Court decided that a provision must be recognised for the obligation from a personalised customer loyalty programme existing on the balance sheet date. The prerequisite is that the legal and/or economic reference point of the obligation lies in the past.

FOR TAX GROUPS

ECJ rulings on fiscal unity for VAT purposes

Following a referral by the German Federal Fiscal Court, the ECJ ruled on December 1, 2022 (Rs C-141/20 and Rs C 269/20) on the German rules on fiscal unity for VAT purposes. We present the two rulings and provide an initial assessment.

Actual implementation of a profit and loss transfer agreement

According to the ruling of the Cologne Fiscal Court of June 21, 2022 (Case No. 10 K 1406/18), a profit and loss transfer agreement is only actually implemented if the obligations created by the profit and loss transfer agreement are settled within a reasonable period of time.

FOR EMPLOYERS AND EMPLOYEES

Details of the obligation to record working hours - Update

The German Federal Labour Court caused a major stir with its decision of September 13, 2022 (Case No. 1 ABR 22/21) on the obligation of employers to record the working time of their employees. The reasons for this landmark decision have now been published.

Remuneration for car number plate advertising is remuneration for work

The German Federal Fiscal Court ruled in its decision of June 21, 2022 (Case No. VI R 20/20) that remuneration for advertising by the employer on the number plate holder of the employee’s private car is caused by the employment relationship and thus leads to remuneration for work.

Taxi journeys between home and workplace only deductible with distance lump sum

In its ruling of June 9, 2022 (Case No. VI R 26/20), the German Federal Fiscal Court decided that an employee can only deduct his or her journeys between home and workplace for tax purposes if he or she uses a taxi at the rate of the distance lump sum.