German federal constitutional court ruling on sister partnerships
In a recent decision, the German Federal Constitutional Court ruled that a provision in the Income Tax Act, allowing tax-neutral transfers of assets, does not extend to transfers between joint assets of sister partnerships with identical investments.
Analysis by Flick Gocke Shaumburg
In a recent decision, the German Federal Constitutional Court ruled that a provision in the Income Tax Act, allowing tax-neutral transfers of assets, does not extend to transfers between joint assets of sister partnerships with identical investments.
The court deemed this exclusion a violation of the principle of equality. Consequently, the judgment compels the legislature to institute new regulations retroactively from December 31, 2000. The court dismissed justifications rooted in legal entity changes or abuse prevention, emphasising the necessity for legislative amendments.
For an in-depth analysis of this development and its implications for tax policy, Dr. Gustav Liedgens and Mathias Veil from Flick Gocke Schaumburg provide a comprehensive exploration in the full article available here.
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