Germany Fiscal Court Clarifies Timing of Passive Exit Taxation Under DTA With Spain

The German Federal Fiscal Court April 9 posted online Decision No. I R 41/22, clarifying the timing of passive exit taxation under the DTA with Spain. The taxpayer, a German partnership, held shares in a Spanish company as special business assets. Following the entry into force of the 2011 Germany-Spain DTA, which introduced a real estate clause granting Spain taxing rights over specified real estate-related shares, the Tax Office assessed exit tax for 2013. On appeal, the Federal Fiscal Court found that: 1) passive exit taxation may arise solely due to a change in the legal framework, such as the ...