Lower tax court clarifies change-in-ownership rules
Global Tax Update:October 2015/Germany
Lower tax court rejects tax authorities’ interpretation of the definition of parties acting in concert in the change-in-ownership rules.The tax court decision is the first decision clarifying the definition of the term “parties acting in concert” for purposes of the change-in-ownership rules, and it provides valuable guidance for taxpayers. (Global Tax Update:October 2015/Germany)
The lower tax court of Lower-Saxony issued a decision dated 26 February 2015, in which it rejects the German tax authorities’ broad interpretation of the definition of “parties acting in concert” for purposes of the change-in-ownership rules. The lower tax court concluded that for parties to be considered to be acting in concert for these purposes, it is insufficient for the parties to have coordinated and aligned their acquisitions of ownership interests in a loss company; the parties also must pursue common economic interests regarding their investments, and this pursuit must be agreed upon at the time of the relevant change in ownership.
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