German update

16.10.2019
Hard Brexit – What you need to pay attention to in the worst case

On 6.9.2019, the UK’s lower house of Parliament passed a law aimed at preventing a no-deal Brexit on 31.10.2019. Under this Act, if the Prime Minister has not secured an agreement with the EU by 19.10.2019 then he must request a delay to Brexit until 31.1.2020. As it is currently not foreseeable what such an agreement would look like, in particular as regards the EU border between Ireland and Northern Ireland, – and as the Prime Minister is insisting that he will refuse to seek an extension to the Brexit deadline despite the UK Act – no-deal still constitutes the worst case. In the following section we present the most important consequences that could result in the case of a no-deal Brexit and, to a large extent, in all other forms of Brexit, too.

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15.10.2019
Working time account models for the organs of corporations – New recognition guidelines from the Federal Ministry of Finance

Up to now, the fiscal authority has not recognised, for payroll tax purposes, agreements on time accounts for employees who have also been appointed as an organ (e.g. managing directors of a GmbH (private limited company), the executive board of an AG (a joint stock company)). After a landmark ruling of the Federal Fiscal Court (Bundesfinanzhof, BFH), the Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) made revisions to its guidelines in a circular from 8.8.2019.

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14.10.2019
Tax incentive scheme for research and development

The German Federal Cabinet has adopted a draft law on the introduction of a tax incentive scheme for research and development (R&D). There are plans to pass the law before the end of this year so that the provisions can come into force from 2020. The aim of the following report is to give an overview of the planned new regulations.

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13.10.2019
New Federal Ministry of Finance circular on the obligation to keep records and maintain a cash register

The German Act for the Protection Against Manipulation of Digital Basic Records, from 22.12.2016, (the so-called “2016 Cash Register Act”) led to the creation of Section 146a of the Fiscal Code (Abgabenordnung, AO) – a regulatory provision for accounting and record-keeping using electronic record-keeping systems. In the meantime, on 17.6.2019, the Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) published an application decree for Section 146a AO where the requirements together with the Cash Register Anti-Tampering Ordinance (Kassensicherungsverordnung, KassenSichV), from 26.9.2017, have been clearly specified.

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12.10.2019
No accrual of leave entitlements

Since the judgements of the European Court of Justice (ECJ) on the transferability and expiry of leave entitlements, new obligations have arisen for employers if leave that has not been taken by the end of a holiday year or carry-over period is supposed to expire with no compensation. The Federal Labour Court (Bundesarbeitsgericht, BAG), in several rulings, has now set out these obligations in detail.

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