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In its ruling dated 27.11.2024 (case no. I R 23/21), the Federal Fiscal Court (BFH) decided that purely managing holding partnerships can also act as the controlling company within the scope of a consolidated tax group for corporation tax purposes - even if no paid intra-group services are provided. This decision represents a significant expansion of the understanding of commercial activity within the meaning of Section 14 para. 1 sentence 1 no. 2 sentence 2 KStG and Section 15 para. 1 sentence 1 no. 2 EStG.

Last year the Federal Fiscal Court (Bundesfinanzhof – BFH) decided that paying a pension and salary to an owner-director at the same time does not mean that in principle the pension is to be classified as a hidden profit distribution. The tax authorities only partially adopted the principles of the judgment in the latest amendment of its Federal Ministry of Finance (BMF) circular. Cases where directors work part-time are critical.