Real-estate tax compliance — current hot topics from the tax audit

The management of individual real estate properties up to larger real estate portfolios is already a demanding task, which becomes even more complex when tax requirements have to be taken into account. Not least against the background of the current BMF letter on the differentiation of the correction from the tax voluntary disclosure, tax compliance has once again increasingly become the focus of all parties involved. Tax practice shows that pitfalls lurk in many places and even the best structure memo offers no guarantee of a carefree life from a tax point of view if circumstances change later or new circumstances arise or the original legal and tax requirements were implemented differently or not at all from the outset.

The following article is intended to present the key issues arising from tax audits we have conducted and thus at the same time offer suggestions for possible solutions, assuming an inbound scenario in which real estate located in Germany is held by domestic or foreign special purpose entities.

Shareholder loan and appropriate interest rate -
All-clear for Group retention

Real estate fund financing is usually structured in such a way that part of the investment amount is financed by bank loans. Since banks generally only provide financing up to a certain loan-to-value ratio