German update

16.09.2019
The digital tax audit – Preparation is essential

The tax authorities are likewise going digital. Companies are currently noticing this, in particular, during tax audits by the authorities. The deployment of digital assistance systems is frequently already common practice. During the initial phase of digital tax audits, due to the lack of experience, it was still possible to bank on the auditor still showing some leniency. However, at the present time, companies should no longer rely on that.

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15.09.2019
Stricter enforcement of existing and new requirements

New version of Federal Ministry of Finance circular on the ‘Principles of Proper Keeping and Retention of Accounts, Records and Documents in Electronic Form as well as Access to Data’

The fiscal authority published an amended version of the ‘Principles of Proper Keeping and Retention of Accounts, Records and Documents in Electronic Form as well as Access to Data’ (Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff, GoBD) in a new Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) circular, on 11.7.2019. This has replaced the previous guidelines from 14.11.2014. In the latest circular, the fiscal authority has described how – in the course of the ongoing digitalisation and automation wave in IT systems and processes of businesses – they would expect the requirements under the GoBD to be complied with and how these should potentially be documented.

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14.09.2019
Tax aspects of eSports

More and more people are now earning their income via new information technologies. The following section discusses the extent to which so-called eSports should be viewed as sports and how, in the context of tax, the income and expenses generated with them should be classed.

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13.09.2019
Shareholdings in a corporation as necessary business assets

The inclusion of shareholdings in corporations in private or business assets can be of considerable significance for business owners. How the assets are allocated would be of relevance, for example, if the issue were the taxation of the related investment income (dividends). The Federal Fiscal Court (Bundesfinanzhof, BFH), in a recent ruling, went into detail about the pre-conditions for necessary business assets for tax purposes.

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12.09.2019
Subsequent acquisition costs when shareholdings in corporations are sold pursuant to Section 17 of the German Income Tax Act

The accounting treatment of the subsequent acquisition costs when shareholdings in corporations are sold pursuant to Section 17 of the Income Tax Act (Einkommensteuergesetz, EStG) was the subject of the Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) circular from 5.4.2019 (case reference: IV C 6 – S 2244/17/10001). In this, the BMF dealt with the application of the three recent rulings by the Federal Fiscal Court (Bundesfinanzhof, BFH) on the aforementioned topic.

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