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BFH-Insights

Federal Fiscal Court ruling: Excessive purchase price - real estate transfer tax alongside gift tax and hidden profit distribution

Where a limited liability company [GmbH] pays a person close to its shareholder an excessive purchase price for a property, real estate transfer tax is assessed on the full purchase price (section 8(1) of the Real Estate Transfer Tax Act [Grunderwerbsteuergesetz–GrEStG]) – even if the excess price, as a hidden profit distribution [verdeckte Gewinnausschüttung–vGA], simultaneously triggers gift tax. An amendment of the real estate transfer tax assessment on account of conflicting tax assessments under section 174(1) sentence 1 of the Fiscal Code [Abgabenordnung–AO] is ruled out, because the relationship of mutual exclusivity between the two taxes covers only gifts of real property within the meaning of section 3 no. 2 sentence 1 of the Real Estate Transfer Tax Act. The decision confirms that section 174 of the Fiscal Code is not a general instrument for overriding the finality of assessments (Federal Fiscal Court [Bundesfinanzhof–BFH] judgement of 29 Jul 2026, file ref. II R 11/24).

Dr Martin Weiss
| 12 min read | 19 Oct 2026
BFH-Insights

Federal Fiscal Court ruling: Federal Fiscal Court on financial integration in tax groups

Federal Fiscal Court V R 36/24: VAT group despite two-thirds clause with capital majority and sole managing director. Corporation and trade tax: stricter test.

Dr Martin Weiss
| 11 min read | 19 Oct 2026
BFH-Insights

Federal Fiscal Court ruling: RETT group clause - holding period carries over on split-up

In a demerger [Aufspaltung], the acquiring company need not restart the five-year pre-retention period of the real estate transfer tax group clause. The Federal Fiscal Court [Bundesfinanzhof–BFH] attributes to it, as partial universal successor, the prior holding period of the demerged company, provided the shareholding in the dependent company was included in the division and acquisition agreement. The periods under section 6a of the Real Estate Transfer Tax Act [Grunderwerbsteuergesetz–GrEStG] are not strictly personal but tied to the shareholding. However, the result does not readily extend to spin-offs [Abspaltung],  and hive-downs [Ausgliederung], (Federal Fiscal Court judgement of 29 Jul 2026, file ref. II R 5/23).

Dr Martin Weiss
| 10 min read | 16 Oct 2026
BFH-Insights

Federal Fiscal Court ruling: Gift tax on limited partnership interests with a negative value

When valuing limited partnership interests for gift tax purposes, negative values of the share in the jointly held assets (“Gesamthandsvermögen”) must also be taken into account. This applies even where the limited partner’s contribution has been paid in full and there is no obligation to make additional contributions. In its judgement of 29 Jul 2026, file ref. II R 15/23, the Federal Tax Court [Bundesfinanzhof–BFH] contradicts the view of the German tax administration (R B 97.5 of the Inheritance Tax Guidelines 2019 [Erbschaftsteuer-Richtlinien–ErbStR 2019]). This can significantly reduce the assessed acquisition value, particularly in the context of business succession where shareholder loans are transferred at the same time. The decisive factor is the consistent application of the statutory valuation scheme under section 97(1a) of the Valuation Act [Bewertungsgesetz–BewG].

Dr Martin Weiss
| 9 min read | 15 Oct 2026
BFH-Insights

Federal Fiscal Court judgement: Cash-basis VAT and voluntary bookkeeping (section 20 of the VAT Act)

Taxation on the basis of consideration received is a substantial cash-flow advantage for professional practices and other members of the liberal professions [Freiberufler]: VAT need not be paid until the fee comes in. On its wording, section 20 sentence 1 no. 3 of the VAT Act [Umsatzsteuergesetz–UStG] ties the authorisation solely to income from a liberal profession within the meaning of section 18(1) no. 1 of the Income Tax Act [Einkommensteuergesetz–EStG]. By judgement of 16 Apr 2026 (file ref. V R 16/24), however, the fifth chamber of the Federal Fiscal Court [Bundesfinanzhof–BFH] adheres to the position that cash-basis taxation [Ist-Besteuerung] is unavailable where the member of a liberal profession voluntarily uses accrual accounting. At the same time, the fifth chamber refines which records remain not harmful.

Dr Martin Weiss
| 11 min read | 12 Oct 2026
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Press releases

11 Mar 2026

Grant Thornton increases annual revenue to EUR 264 million in financial year 2024/25

The audit and advisory firm Grant Thornton in Germany ended the 2024/25 financial year on September 30, 2025, with consolidated revenue of EUR 264 million (up 6 percent on the previous year). The Audit & Assurance division recorded particularly strong growth with an increase of 14 per cent compared to the previous year.

09 Feb 2026

Grant Thornton Germany wins Martin Biegel for the new position of CFO/COO

Martin Biegel joined the Senior Leadership Team of the audit and advisory firm Grant Thornton Germany in February as the new Chief Financial Officer/Chief Operating Officer (CFO/COO) and in this role will actively help drive the firm’s strategic development.

13 Oct 2025

Grant Thornton Germany and Cinven enter into strategic partnership

The Equity Partners of Grant Thornton AG Wirtschaftsprüfungsgesellschaft (“Grant Thornton Germany”) have approved the strategic partnership with international private equity firm Cinven. This marks a key milestone for the transaction initially announced on 10 September 2025, which is expected to close in the first quarter of 2026. The partnership further strengthens Grant Thornton Germany’s position as a leading, trusted service provider in the German audit and advisory market, ushering in its next phase of growth.

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