Germany MOF Releases Decision Explaining Trade Tax Liability on Sale of Shares During Company Restructurings

The German Ministry of Finance Jan. 4 released Tax Court Decision No. IR 13/18, explaining trade tax liability on proceeds from the sale of shares during company restructurings. Shareholders of a company entered into an option rights agreement with the company for selling off their shares at book value. The shareholders inquired about the trade tax liability on the sale of shares. The court held that: 1) contributions brought in by individuals or partnerships into a company through the dissolution of their former businesses don’t trigger trade tax liability; and 2) a trade tax exemption applies if shareholders sell off ...