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Federal Fiscal Court ruling: constitutionality of the provision concerning 5.5% interest in the Valuation Act

BFH-Insights

The overall real interest rate plays a role in various areas of tax law, but it is not always “automatically” implemented into tax law by the legislature. Pension provisions are to be discounted at a “fixed” interest rate of 6%. But other provisions are discounted using an equally “fixed” interest rate of 5.5%. The 5.5% interest rate is also used in the Valuation Act [Bewertungsgesetz–BewG], where it is applied throughout the provisions of sections 12 and following. The Federal Fiscal Court [Bundesfinanzhof–BFH] has now ruled on the level of the statutory interest rate regarding section 14 (“lifetime usufructs and benefits”) (file ref. II R 35/23).

Dr Martin Weiss
| 6 min read | 24 Jun 2026

The first tax authority guidance on the tax consequences of hurdle/growth shares

Employee share ownership & payroll tax

In a notice issued on 28/05/2026 (S 2332.1.1-29/4 St36) the Bavarian Tax Office addressed the payroll tax treatment of employee-owned shares subject to a liquidation preference – hurdle or growth shares, as they are known. The notice is of particular relevance to start-ups, growth companies and private equity structures. It clarifies that hurdle or growth shares do not automatically result in employment income. What is crucial is instead how the shares are actually structured, valued, validly implemented under company law, and how the ownership model is actually vested.

Hannes Zug
Lukas Kawka
| 4 min read | 22 Jun 2026

The changing global tax landscape – why businesses need to act now

How international companies keep their taxes under control

The global tax landscape is not merely changing – it is undergoing a fundamental structural transformation and for good. Companies can no longer simply react to changes; they need to strategically and proactively realign their tax function.

Lars Korte
| 4 min read | 11 Jun 2026

Federal Fiscal Court confirms 0% withholding tax relief for US S-Corporations under the US–Germany tax treaty

International Tax / US–Germany Tax Treaty / Withholding Tax

German Federal Fiscal Court confirms potential 0% withholding tax relief for US S-Corporations and comparable hybrid structures. In a decision published recently (BFH dated 11 March 2026 – I R 13/23), the German Federal Fiscal Court (Bundesfinanzhof – BFH) confirmed that the participation exemption under Art. 10(3) of the US–Germany Double Tax Treaty (“DTT US”) may also apply to qualifying US S-Corporation (“S-Corp”) structures. The decision may also have implications for certain US LLC structures and other hybrid entities.

Tobias Behrens
Lukas Kawka
| 4 min read | 05 Jun 2026

Trade Tax Add-Back of Water Use Charges

BFH on the Trade Tax Add-Back of expenses for the licensing of rights

Trade tax add-backs and deductions directly affect the amount of trade tax payable. In practice, section 8 no. 1 letter f) of the German Trade Tax Act (GewStG) frequently raises difficult questions of interpretation, particularly where public-law rights of use are concerned. In its recent decision, the Federal Fiscal Court (BFH) clarified when payments qualify as expenses for the licensing of rights within the meaning of this provision — and when they relate merely to a permit with no independent economic value.

Dr Gregor Weimer
| 3 min read | 02 Jun 2026
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Press releases

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

11 Mar 2026

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.

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

09 Feb 2026

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.

Grant Thornton Germany and Cinven enter into strategic partnership

13 Oct 2025

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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