Editorial

Dear Readers,

We kick off this April edition with part two of our discussion of German exit taxation as our Key Issue report. In the 2/2025 issue of the PKF Magazine, on the basis of a practical case study, we described the consequences for a shareholder of a German limited liability company of moving to another country where the corresponding amounts of tax could even result in an existential threat for the shareholder. We now present various strategies that can make it possible to avoid this tax and manage the situation for the long term. In our second report you can read how legislative amendments can involve legal uncertainties - educational services were and remain exempt from VAT under certain conditions. However, the requisite changes made at the insistence of the EU, and which came into effect on 1.1.2025, left open questions with respect to the scope of the exemption as well as to the application procedure at the respective competent federal state education offices. Subsequently, we report on a case that our PKF colleagues in Nuremberg successfully litigated before the Federal Fiscal Court. This concerned an issue that a local tax office and also a tax court had classified as a constructive dividend. The PKF colleagues were able to clearly demonstrate that a ruling that is normal for a limited liability company cannot be transferred to a joint stock corporation. The supervisory board plays an important role here.

In our Legal section we have a report on a new development with respect to staff leasing. Previously, there were considerably fewer rules here in a corporate group than between two independent companies. According to a recent ruling, the reins will now be tightened for corporate groups.

As always, we round off our varied range of issues with further short reports. In Tübingen, a German city that has embraced green policies, tax is now levied on disposable packaging; following the Federal Constitutional Court’s judgement that this is lawful other cities could adopt this practice. From a recent ECJ judgement it follows that effectively every employee has the right to time recording. We then suggest a link that has answers to the numerous questions about the German cash register legislation; we then go on to answer a question for lessors as to whether the paying into a reserve or only the use of such funds results in tax-deductible expenses. And finally, another piece of legal certainty - property purchasers are liable for many things, but fortunately not any more for the vendors’ tax offences.

We wish you an interesting read. 
Your PKF Team