Germany Fiscal Court Clarifies Retroactive Loss of Real Estate Transfer Tax Benefits After Insolvency

The German Federal Fiscal Court Dec. 11 posted online Decision No. II R 50/21, clarifying the retroactive loss of real estate transfer tax benefits after insolvency. The taxpayer, a partnership, received a tax exemption for a property transferred to it by its sole limited partner. After insolvency proceedings, the partner’s interest was transferred to a new company. The Tax Office retroactively assessed tax, contending that the exemption didn’t apply due to a shareholding change within five years of the property transfer. On appeal, the Federal Fiscal Court found that: 1) the change in partnership interest within five years nullified the ...