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Federal Fiscal Court ruling: Forfeiture of a partnership’s trade tax losses on succession

BFH-Insights

Trade tax losses under section 10a of the Trade Tax Act [Gewerbesteuergesetz–GewStG] are assessed separately in the taxpayer’s favour under sentence 6 of section 10a and, if there is positive trading income, deducted from this in the following tax periods. Like income tax and corporate income tax (section 10d(2) Income Tax Act [Einkommensteuergesetz–EStG]), the conditions for minimum taxation are to be observed (section 10a sentences 1 and 2 Trade Tax Act). For commercial partnerships, the partners are entitled to the loss deduction. If the entire interest is transferred, whether for consideration or not, the loss attributed to the departing partner is forfeited without compensation, as the Federal Fiscal Court [Bundesfinanzhof–BFH] has now confirmed (IV R 14/24).

Dr Martin Weiss
| 8 min read | 15 Sep 2026

Federal Fiscal Court judgement: Loss offsetting for commercial animal breeding (section 15(4) Income Tax Act)

BFH-Insights

Income tax law contains numerous “loss schedules”, which make offsetting losses against income from other sources difficult and, in extreme cases, block it entirely. The oldest of these relates to commercial animal breeding and husbandry (section 15(4) sentences 1 and 2 of the Income Tax Act [Einkommensteuergesetz–EStG]). After the Federal Constitutional Court [Bundesverfassungsgericht–BVerfG] approved minimum taxation of profit (ruling of 23/7/2025, 2 BvL 19/14), the sixth chamber of the Federal Fiscal Court [Bundesfinanzhof–BFH], also held on 11 June 2026 (VI R 29/24) that this restriction was constitutional – including when the losses are finally forfeited as a result of the loss carryforward being stretched across time (permanent loss). The focus of advice thereby finally moves to classification and determination for tax purposes.

Dr Martin Weiss
| 10 min read | 09 Sep 2026

Minimum taxation: the Federal Fiscal Court specifies equity under section 163 of the Fiscal Code

BFH-Insights

Minimum taxation on income taxes limits the direct deduction of loss carryforwards in many cases (section 10d(2) of the Income Tax Act [Einkommensteuergesetz–EStG]; section 8(1) sentence 1 of the Corporate Income Tax Act [Körperschaftsteuergesetz–KStG]; section 10a of the Trade Tax Act [Gewerbesteuergesetz–GewStG] carryforwards are definitely forfeited, this can have permanent effects (known as “definite effects” [“Definitiveffekte”] in German). The Federal Constitutional Court [Bundesverfassungsgericht–BVerfG] ruled on 23 July 2025 that the rules were (2 BvL 19714), but also expressly referred to the equity mechanisms in sections 163 and 227 of the Fiscal Code [Abgabenordnung–AO]. The first chamber of the Federal Fiscal Court [Bundesfinanzhof–BFH] has now picked this reference up and specified the conditions that apply for equitable relief for balance-sheet effects from reversals of earlier write-downs (I R 20/25, previously I R 59/12).

Dr Martin Weiss
| 7 min read | 07 Sep 2026

Sugar tax planned from 2028: the tax and strategic impact on the food and drink industry

Indirect tax & excise taxes

The Federal Government is pushing forward with the introduction of a tax on sugary drinks. According to the basic information released so far, starting from 2028 the tax is to have an effect as a tool to direct health policy and at the same time generate more income for public budgets or the health system. But the current discussion is already showing that the scope, assessment basis and product categories are politically contentious.

Andreas Clouth
Fabian Greco
Ilija Jovanovic
| 3 min read | 04 Sep 2026

Federal Tax Court judgement: First ruling on the deduction ban under section 4i of the Income Tax Act

BFH-Insights

Interest deduction in German income tax law is surrounded by numerous prohibitions and restrictions. Once the business-related nature of the expense has been established (section 4(4) of the Income Tax Act [Einkommensteuergesetz–EStG]), the interest limitation rule (section 4h Income Tax Act, section 8a Corporate Income Tax Act [Körperschaftsteuergesetz–KStG]) and the trade tax add-back under section 8 no. 1 of the Trade Tax Act [Gewerbesteuergesetz–GewStG], among other things, must be observed. There are further restrictions from section 4(4a) of the Income Tax Act for “special situations”. In a cross-border context, the Federal Fiscal Court [Bundesfinanzhof–BFH] has now ruled for the first time on the “anti-double-dip” rule contained in section 4i of the Income Tax Act (file ref. IV R 36/23).

Dr Martin Weiss
| 9 min read | 03 Sep 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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