Editorial

Dear Readers,

The so-called German Bureaucracy Reduction Act IV, which was passed towards the end of  last year, provides that transfer pricing documentation needs to be expanded by adding a transaction matrix -- although how bureaucracy is supposed to be reduced here is anyone’s guess. Nevertheless, in the Tax section, we address the topic of the transaction matrix and we have taken it up as our Key Issue and the realisation of this requirement is clearly presented for you there. In a further article, we report on the change in the view of the fiscal authority in respect of the recording of currency effects in a tax return - this, too, will not contribute towards reducing bureaucracy. In addition, as regards the topic of the ‘new’ real estate tax, we have focused on the assessment notices that have started to be issued since the beginning of the year and are providing nasty surprises for many private real estate owners. The report that then follows - the fourth in the Tax section - discusses the issue of German exit tax. On the basis of a practical case study, we outline the consequences for a shareholder of a GmbH [German limited liability company] of moving to another country; the corresponding amounts of tax could even result in an existential threat for the shareholder. This can however be prevented if avoidance strategies are deployed, and these will be explained in the March issue of the PKF Magazine.

In the sections that then follow the tax topics, we discuss the challenges for companies that result from the higher interest rate level. Moreover, we take another look at a regulation from the Bureaucracy Reduction Act - this time from an employment law perspective. Yet, in contrast to the transaction matrix, the recognition of employment agreements that have been concluded electronically does actually also constitute a simplification for companies.  A further legal report might be amusing to begin with - however, in the meanwhile, the use of smilies in legal transactions, too, has become important and smilies should therefore be used with caution.

Concise short reports on the topics of the burden of proof in the case of wildlife accidents, the gifting of an encumbered property and an EU legal action over the reinvestment reserve for capital gains on the sale of real estate, as well as articles on the German business identification number and the tax consequences of a redemption for consideration of a usufruct round off the range of issues discussed in this February edition of our PKF Magazine. 

You can look forward to an interesting read. 
Your PKF Team