Law & Numbers - News Tax

Deemed non tax-deductibles (5 % of capital gain on shares) unconstitutional?

09.12.2007 (Germany)

Tax Court Hamburg applies for decision by the Constitutional Court

On November 11, 2007 (5 K 153/06) the Tax Court Hamburg decided to ask the Constitional Court whether Section 8 b para 3 Sentence 1 and para 5 sentence 1 Corporation Tax Law are is line with the constitution.

According to these rules 5 % of capital gains from from the tax-free disposal of shares in corporations are added back to the taxable income as deemed non-deductible expenses. The Tax Court Hamburg is in doubt whether this is constitutional since the law does not foresee an escape clause to demonstrate that the actual (non tax-deductible) costs related to the transaction are lower.

We recommend to keep similiar cases open until the Constitional Court has decided.

Contact for direct information: B.C.Gerow@EGSZ.de






Warning: mysqli_close() expects parameter 1 to be mysqli, null given in /home/www/web614/html/inc/connclose.php on line 3
Die Datenbankverbindung wurde nicht geschlossen.