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Including an increase in funding volumes and faster payout. We’ve put the most important details together below.

Cologne Fiscal Court has held that section 50d(1) sentence 11 of the German Income Tax Act [Einkommensteuergesetz – EStG] has merely procedural character. The judgment con-tributes significantly towards eliminating legal uncertainty and has set limits on the tax authori-ties’ pro-taxation stance. Here are the details.

On 2 August 2022, the tax authorities published a circular on the application of tax deductions under 50a of the German Income Tax Act (Einkommensteuergesetz – EStG) for remuneration from software development services. The BMF circular concerns cases in which German businesses develop software using businesses that are resident abroad.

In May 2022, the European Commission presented a draft directive to equal out the tax treatment of equity and debt, which allows for the deduction of notional interest on equity on the one hand, and contains a further limitation on interest deduction on the other.