Germany MOF Releases Court Decision Explaining Taxation on Nonresident Property Rental Income

The German Ministry of Finance July 19 released Tax Court Decision No. I R 12/19 (IR 78/14), explaining the taxation of nonresident property rental income. A taxpayer solely owned a company based in Switzerland, which owned two rented properties. The tax authority issued notice on separate determinations of tax bases for company ownership and the rental income. The taxpayer appealed, arguing the rental income was ancillary income and the additional taxation violated the free movement of capital under European Union (EU) law. The court denied the taxpayer’s appeal, explaining: 1) the additional assessment of interim income generated by an intermediate ...