Current developments in tax compliance in real estate and private equity

After months of coalition negotiations, politicians are once again able to act and there is once again an Annual Tax Act 2018. Share deals are suddenly back in focus in both real estate transfer tax and income tax law. Important topics such as the appropriate interest rate on shareholder loans (keyword: group retention) or the return of capital contributions from third countries received further impetus. In the area of the recognition of liquidation losses from equity investments held as private assets and loan losses, the BFH case law shows positive impulses. Likewise, there is currently hope for a change of mind by the BFH in the area of commercial infections. This article is intended to highlight key developments and their significance for practice.

Real Estate

• Shareholder loans and appropriate interest rate - all-clear for Group retention? We already reported on the basic topic in the previous issue of FYB 2018. Since then, the rulings of two other tax courts have found their way to the BFH for appeal. In its ruling of December 7, 2016 (appeal filed I R 4/17), the Münster Fiscal Court addressed in particular the issue of the methodology for determining the appropriate interest rate as an arm's length price. In the opinion of the Münster Regional Court, an external price comparison should not be possible in the case of the judgment due to the lack of comparability of the group financing company with other lenders.