European Court of Justice Issues Preliminary Ruling on German Gift Tax Rules for Family Foundations

The European Court of Justice (ECJ) Nov. 13 issued a preliminary ruling in Case No. C-142/24, on German gift tax rules for family foundations established abroad. The taxpayer, a Liechtenstein-based family foundation created by a German resident, challenged the application of the highest tax class, for gift tax purposes, on asset transfers to the foundation, arguing that it restricted the free movement of capital under the European Economic Area (EEA) agreement. The German tax authority denied preferential treatment because the foundation wasn’t established in Germany, even though it served family interests. Upon request for a preliminary ruling, the ECJ held ...