Private Wealth 2020

Last Updated August 12, 2020

Germany

Law and Practice

Authors



Flick Gocke Schaumburg has a total of seven offices in Germany (Bonn, Frankfurt am Main, Hamburg, Berlin, Munich, Stuttgart and Düsseldorf), as well as a representative office in Switzerland (Zurich). With more than 40 years' experience in the field, the firm combines outstanding expertise in German and international tax law with specialist know-how in other relevant areas of business law. Flick Gocke Schaumburg advises on national and international mergers and acquisitions, disposals, venture capital and private equity transactions, and complex restructurings, also providing comprehensive advice to high net worth individuals, family-owned businesses, foundations and not-for-profit organisations on all tax and legal issues related to wealth management and succession; at present, the firm's client roster is in excess of 2,000, including the majority of the DAX-listed companies. In terms of tax crime and white-collar matters, Flick Gocke Schaumburg covers the entire spectrum from risk assessments to representation in criminal proceedings.

German Income Taxation

Germany imposes a federal personal income tax on the worldwide income of resident individuals (hereafter, Income Tax Act or ITA). Resident corporations, associations and certain segregated pools of assets are subject to federal corporate income tax (hereafter, Corporate Income Tax Act or CITA). Both taxes are levied annually.

An individual who has a place of residence or a place of habitual abode in Germany has a worldwide income tax liability, pursuant to Section 1 (1) ITA. Whereas a place of residence is defined as the possession of a property with the intention to occupy (not necessarily on a fulltime basis), a place of habitual abode is where the taxpayer remains for more than six months. Non-resident individuals are subject to income tax from certain German sources specified in Section 49 ITA.

The following types of income are subject to income tax pursuant to Section 2 (1) ITA:

  • income from farming and forestry;
  • business income;
  • income from self-employment;
  • employment income;
  • income from capital assets;
  • rental income; and
  • other types of income listed in Section 22 ITA.

There are specific rules for each category, which regulate the types of expenses that may be deducted and the tax-free allowance available for those categories. Gains on the sale of privately held assets are subject to income tax under Section 22 ITA if they have been held for less than ten years in the case of real estate, or one year in the case of other assets.

In calculating the individual’s taxable income, the income from each of the above categories is added together, and losses can be deducted. There are provisions by which losses can be carried backwards or forwards. A taxpayer can deduct special expenses such as pension contributions, health insurance, school fees and charitable donations, and extraordinary expenses such as costs of medical treatment (in each case up to a prescribed threshold). There are also tax reliefs for those with children, and rules that allow married couples and registered partnerships to be taxed jointly. A special tax regime applies to income from capital assets (Section 20 ITA), which is subject to withholding tax at a rate of 25% and is not subject to supplementary taxation at the taxpayer’s usual rate.

The income tax rates for 2020 are as follows: The tax-free personal allowance includes income up to EUR9,408. The tax rate for income above EUR9,408 starts at 14% and increases up to 45% for income above EUR270,500. In addition to the income tax, a solidarity surcharge will be levied as a separate tax, at a rate of 5.5% of the definite income tax liability.

Corporations and other types of legal entities listed in Section 1 (1) CITA are subject to corporation tax on their worldwide profits if their place of management or registered office is in Germany. Non-resident legal entities are subject to corporate tax from certain German sources mentioned in Section 2 CITA in connection with Section 49 ITA. Partnerships are not subject to corporation tax, but the partners are individually subject to income tax. Corporation tax is levied on a corporation’s income, which is determined in accordance with the income schedules in Section 2 (1) ITA as mentioned above (the CITA refers comprehensively to provisions of the ITA that deal with determining the income). After the deduction of any available allowance, profits are subject to corporate tax at a rate of 15% (plus the solidarity surcharge of 5.5% of the corporate tax liability).

German Gift and Inheritance Taxation

General tax principles

Transfers at death and gratuitous transfers are subject to federal inheritance and gift tax ("Inheritance and Gift Tax Act" or IGTA).

In Germany, the estate is not subject to inheritance tax, but the acquisition of the respective heir or legatee, who is ultimately liable for tax on their individual share of the estate. The inheritance tax also depends on the family relationship between the decedent and the heirs.

The gift tax is levied on gratuitous transfers. Like the inheritance tax, it is based on the concept of accretion of wealth or enrichment. Only transfers that are not contingent on future events and that result in a present benefit to the transferee are taxable. While the income tax employs factual criteria such as so-called economic ownership (beneficial ownership) in addition to legal criteria to identify taxable transfers, the inheritance and gift tax takes a more formal approach. As a rule, a taxable transfer requires the transferee to obtain legal title to the property or at least an enforceable claim under private law.

The gift tax complements the inheritance tax. Therefore, gratuitous transfers and transfers at death by an individual to the same recipient within ten years are aggregated into one transfer. Likewise, the same tax rates and tax-free allowances apply to gratuitous transfers and transfers at death.

Tax-free allowances

Spouses, children and stepchildren, grandchildren, other descendants or (in the case of inheritance, upon death) parents or grandparents, fall into Tax Class I. In Tax Class I, spouses have an allowance of EUR500,000, children or stepchildren one of EUR400,000, grandchildren one of EUR200,000 and other descendants or parents or grandparents one of EUR100,000. Tax Class II includes parents or grandparents in the case of a lifetime gift, siblings, nieces or nephews, stepparents, sons- or daughters in-law, mother- or father-in-law and former spouses. Within Tax Class II all of the above mentioned have an allowance of EUR20,000. Other donees, such as trusts, fall into Tax Class III. The allowance for Tax Class III is EUR20,000.

After deducting the tax-free allowance, the tax rate applicable to the gift or inheritance is as follows.

Tax rates

  • Gifts and inheritances of an amount of up to EUR75,000 are taxed at a rate of 7% in Tax Class I, at a rate of 15% in Tax Class II and at a rate of 30% in Tax Class III.
  • Gifts and inheritances of an amount between EUR75,000 and EUR300,000 are taxed at a rate of 11% in Tax Class I, a rate of 20% in Tax Class II and at rate of 30% in Tax Class III.
  • Gifts and inheritances of an amount between EUR300,001 and EUR600,000 are taxed at a rate of 15% in Tax Class I, at a rate of 25% in Tax Class II and at a rate of 30% in Tax Class III.
  • Gifts and inheritances between an amount of EUR600,001 and EUR6 million are taxed at an amount of 19% in Tax Class I, 30% in Tax Class II and 30% in Tax Class III.
  • Gifts and inheritances between an amount of EUR6 million and EUR13 million are taxed at a rate of 23% in Tax Class I, 35% in Tax Class II and 50% in Tax Class III.
  • Gifts and inheritances between an amount of EUR 13 million and EUR26 million are taxed at a rate of 27% in Tax Class I, 40% in Tax Class II and 50% in Tax Class III.
  • Any gifts and inheritances of more than EUR26 million are taxed at a rate of 30% in Tax Class I, 43% in Tax Class II and 50% in Tax Class III.

As soon as the respective amount is exceeded, the entire amount is subject to the relevant tax rate.

If neither the donor nor the donee has a place of residence or habitual abode in Germany, the tax-free allowances may be reduced by a partial amount. Pursuant to Section 16 (2) IGTA, the tax-free amount is only to be granted pro rata if only part of the acquisition is subject to the limited tax liability. In addition, previous pecuniary benefits accrued by the same person within ten years must also be included in the calculation of the specific allowance.

Tax exemption concerning family Home

The family home can be transferred tax-free between living spouses without any restrictions. There is no tax on a transfer of the family home on the death to the surviving spouse, and there is an exemption for the first 200 sqm of a family home transferred on death to the decedent’s children. However, the tax on a transfer on death can be clawed back if the property is sold or let within ten years. 

Transfer of death maintenance allowances

In the case of a transfer on death, there are maintenance allowances of EUR256,000 for the surviving spouse and up to EUR52,000 (depending on the age of the child) per child aged 27 or younger. These maintenance allowances are reduced by the value of any maintenance payments that are not subject to inheritance tax (such as a widow's pension).

Transfer of business assets, agricultural or forestry property and capital interests

Special treatment applies to business assets, agricultural or forestry property, and capital interests in corporations.

Two different levels of relief are available for the transfer of business assets, agricultural or forestry property and capital interests, each with different conditions attached:

Relief of 85%

This is subject to the conditions that the donee retains the property for five years, and that the total sum of salaries paid during that period is at least 400% of the annual average for the five years before the gift or inheritance (that is, previous employment levels must be largely maintained). If there are more than five but fewer than ten employees, the total sum of salaries must be 250% of the annual average for the five years before, and if there are more than ten but fewer than 15 employees, it must be 300%.

Relief of 100%

This is subject to more stringent conditions that the donee retains the property for seven years, that the total sum of salaries paid during that period is at least 700% (500% if there are more than five but fewer than ten employees; 565% if there are more than ten but fewer than 15 employees) of the annual average for the seven years before the gift or inheritance, and that no more than 20% of the value is attributable to assets under administration.

Relief dependent on value

This relief can no longer be claimed independently of the value of the acquired business assets. A particularly complex tax system applies if the value of the acquired business assets exceeds EUR26 million (all acquired business assets of the deceased/donor within a ten-year period have to be taken into account). According to the "ablation model", the relief is reduced by 1% for each EUR750,000 that exceeds EUR26 million.

Above EUR90 million, the relief for business assets can no longer be claimed. If the value of the acquired assets exceeds EUR90 million or the transferee opts not to use the ablation model, he or she can only apply for an examination of need for relief (Verschonungsbedarfsprüfung). The transferee is not required to use "privileged" business assets, but he has to use 50% of the value of all other assets that he already owns or that he acquires within a ten-year period to pay the regular rate on the privileged business assets.

Furthermore, he also has to use 50% of the value of the management assets that he already owns or acquires within a ten-year period to pay the regular rate for business assets. The total rate for acquired assets that do not qualify as privileged business assets can be 80% or more. This makes tax planning complicated for entrepreneurs if the value of the privileged business assets exceeds EUR 26 million.

Relief models

The relief models for business assets are relevant in cases of unlimited, limited or extended limited gift or inheritance tax liability in Germany. The unlimited inheritance or gift tax liability applies especially if the deceased/donor or the heir/legatee/donee has a residence or habitual abode in Germany or is a German who left Germany for not more than five years (ten years Germany/USA). The limited inheritance and gift tax liability is applicable if a person who lives abroad has, for example, an interest in a German partnership with business assets, or holds a share of at least 10% in a corporation (alone or with other closely related persons).

The extended limited inheritance and gift tax liability can be relevant for Germans who had unlimited income tax liability for at least five of the last ten years before leaving Germany. Therefore, the relief models are highly relevant even for people who do not live in Germany.

So-called management assets within the preferential business assets are fully taxable at the regular rate insofar as the value of such assets exceeds 10% of the acquired company’s assets. The management assets will be calculated and totaled at the group company level (consolidated appraisal of management assets). Therefore, all management assets in the company and its subsidiaries will be taken into consideration and have to be valued.

Special tax relief for family businesses

The maximum special tax relief for family businesses is an additional 30%. There are special requirements for the articles of incorporation that have to be fulfilled (for example, limitation on disposal and on distributions or withdrawals). These provisions have to be incorporated in the articles of incorporation two years before the relevant transfer and have to remain unchanged and regarded for the subsequent 20 years. Family businesses are therefore advised to examine their articles of incorporation and amend them if their provisions do not meet the special requirements of tax relief for family businesses.

Transfer of real estate property

Relief of 10% of the asset value is available for personally held real estate that is let for residential purposes. There are also reliefs for loss-making property or assets of artistic, historical or scientific importance, provided that the donee retains the property for ten years and other conditions are fulfilled. 

Double tax treaties

Germany has double tax treaties that cover inheritance taxes with several other countries. Furthermore, Section 21 of the German Inheritance Tax Act provides for foreign estate taxes on foreign property to be credited against the German inheritance tax liability if the donor/decedent or the donee/heir has his residence or place of habitual abode in Germany, or opts to be treated as being resident in Germany.

Exit taxes for emigrants

If an individual of any nationality who has been resident or had a place of habitual abode in Germany for at least ten years emigrates, the unrealised gain on any shareholding in excess of 1% will be charged to income tax according to Section 6 of the German Foreign Tax Act (hereafter GFTA). If the taxpayer is an EU or EEA citizen and is becoming subject to a comparable income tax regime in another member state, the exit tax liability can be deferred until realisation of the gain.

If a German citizen who has been an income tax resident in Germany for at least five of the last ten years moves to a country classified as a low-tax jurisdiction while retaining significant economic interests in Germany, the individual will be subject to extended limited income tax liability for a period of ten years. This means that the individual will be subject to German income tax on a more extensive list of German sources than other non-residents. Furthermore, extended limited inheritance tax liability will apply for the same period. If the emigrant makes gifts or dies during this period, the class of assets that are treated as German assets (and therefore subject to inheritance tax even if the donor and donee are non-resident) is widened according to Section 4 GFTA. This is in addition to the standard five-year inheritance tax shadow.

A further German exit tax can be triggered if, for example, a limited partner of a German GmbH & Co. KG that does not qualify as a permanent establishment under the relevant double tax treaty, terminates his German residence.

The rules imposing ongoing tax liabilities on emigrants are subject to the application of any relevant double tax treaty. Germany has a wide treaty network.

Currently, the German transfer tax regime is in a rather stable phase. However, in June 2020 the German government has adopted tax relief and support measures worth EUR130 billion for income and corporate tax purposes in order to reduce the negative effects of COVID-19. Among these measures are the decrease of German VAT in the second half of 2020 (19% to 16% and 7% to 5%), short-term aid programmes for small and medium-sized businesses, further depreciation allowances for businesses, augmented loss carrybacks and an increase of the single-parent income tax allowance in 2020 and 2021.

Tax avoidance is dealt with by a general law preventing such avoidance, in addition to the existence of exit taxes. In a nutshell, German tax avoidance provisions intend to prevent the circumvention of tax legislation by abusing generally legal options for conducting tax planning schemes. However, a planning scheme cannot be deemed abusive if the taxpayer provides non-tax reasons for the selected option, which are relevant when viewed from an overall perspective.

Additionally, many tax allowances are connected to complex supplementary tax procedures.

Starting in July 2020, there is a reporting obligation for cross-border tax arrangements in Germany (with retroactive effect). This is the result of a commitment to the EU to introduce a reporting obligation for tax arrangements. The report must be transmitted electronically to the Federal Central Tax Office, from where the data is transferred to a "central register" set up by the EU Commission. The central register can be accessed by the other EU member states.

It is a broad phenomenon that the transfer of assets through generations is performed regularly with control rights in favour of older generations, especially if minors or inexperienced persons are involved. The donor of such assets can retain a usufruct right (Nießbrauch) on the transferred assets so they can claim the emoluments of the asset after the transfer. The withholding of a usufruct right is an estate planning strategy practised for hundreds of years.

The insertion of broad reclaim regulations in gift agreements or the appointment of executors (Testamentsvollstrecker) in last wills as well as the establishment of binding partnership structures are used to divide control and wealth.

Advising high net worth individuals and their families has become an international matter; younger generations are not as deep-rooted in their native countries as former generations. Nowadays, family members frequently change their life circumstances in accordance with their study and business plans, and it is not rare to see that children of high net worth individuals who have spent several years abroad are married with partners of other nationalities. As a consequence, estate structuring requires interaction of estate planning teams from different jurisdictions.

One of the major concerns in this area regards exit tax planning. The cross-border donation of business assets can trigger gift tax as well as an exit tax. Management holding partnerships are used in an effort to combat this tax burden.

The German forced heirship regime depends on the applicable succession law. The EU directive on succession is applicable since 17 August 2015, meaning that in principle the succession law of the domicile of the deceased applies. However, the testator has the right to opt for the laws of the testator's citizenship in the testator's last will. If the testator had their last domicile in Germany or was a German national and chooses the German law of succession, the German succession law is applicable for their entire estate.

According to German succession law, descendants, spouse and parents may have a forced heirship right (Pflichtteilsanspruch) in the amount of 50% of their potential heirship share, according to the rules of intestate succession. The basis of the calculation is the estate at the time of death.

Additionally, a so-called supplement statutory share (Pflichtteilsergänzungsanspruch) may apply since the testator shall not be able to avoid forced heirship rights by minimising their estate in a time period of ten years before their death due to donations to third parties. For calculating the supplement statutory share, the value of the decedent's estate will be increased by the value of such donations. The donations will be fully taken into account within the first year prior to the decedent's death and will be taken into account by one-tenth less for each further year prior to the deceden's death.

The German statutory matrimonial property regime is the regime of accrued gains (Zugewinngemeinschaft) if the spouses have not entered into a marital contract. The spouses are allowed to modify their statutory matrimonial property regime, or to choose the regime of community property (Gütergemeinschaft) or the regime of separation of property (Gütertrennung). However, the matrimonial property regime can only be modified or chosen by marital contract.

If the matrimonial regime of accrued gains applies, each spouse’s assets remain the property of the respective spouse regardless of whether they were acquired before or within the matrimony. In the case of divorce, the death of one of the spouses or due to the change of the matrimonial regime into the separation of property, the spouses have to equalise their accrued gains that were obtained during the matrimony. For the calculation of accrued gains, the period between the day of marriage and the day the matrimonial regime ends, is decisive. According to that, the amount to be paid due to the equalisation has to be determined by comparing the initial assets – ie, the assets at the time the spouses entered into the marriage – with the final assets (especially at the day the divorce petition was delivered to the respondent) of each spouse.

Gratuitous transfers from a spouse to a third party will be taken into account for the calculation, unless these transfers were performed more than ten years ago or were performed with the other spouse’s consent. Otherwise, such transfers will be added to the initial assets of the respective spouse.

In general, there are no differences between assets transferred during lifetime or at death. For income tax purposes, assets are held with their updated historical acquisition costs also after the transfer. Donees/heirs carry forward these historical costs instead of the donor/decedent. The transfer itself does usually not trigger capital gains tax or exit taxes; therefore, no step up occurs.

The gift and inheritance tax-free allowances listed under Section 16 of the IGTA are available every ten years. If estate planning is started at an early stage of the donor's/testator's life, these tax-free allowances can be utilised multiple times as donations are made over several decades. If the donor decides to donate profitable assets like shares or rented real estate, he or she can make a gift while retaining a usufruct right. However, this usufruct right is taken into consideration when determining the value of the transfer of assets.

Additionally, family limited partnerships (Familien-KG) are used as tax planning mechanisms, making the children of the donor/testator his limited partners in this structure. The main benefit of such a structure is that the donor/testator can divide controlling rights in order to ease their children into the responsibilities of wealth management and limit their initial involvement in the operations of the structure while at the same time retaining a large degree of control over the partnership structure. As limited partners, the children of the donor/testator have no ability to control, direct or otherwise influence the operations of the partnership structure.

Furthermore, pre- and postnuptial agreements can be a tax-efficient tool for transfers between spouses.

The digital estate is an interplay of inheritance law, fundamental rights, privacy and business practices of service providers. In Germany, there are only a few judicial verdicts in relation to the digital estate, so that many legal issues are currently still unclear and somewhat controversial. There is no problem if the data is embodied on a device such as a USB stick or a hard disk, as these objects are transferred by way of universal succession to the heirs. 

A problem arises when the data is stored online, eg, on a cloud or in an online account. There is no agreement in the literature on whether digital assets should be included in the inheritance as they are personal assets; it is argued that accounts and data of a private nature are not heritable. According to the prevailing opinion in the literature, the digital estate should be inheritable.

The German Supreme Court decided in a ruling in 2018 that the heirs are entitled to access the Facebook account of the deceased. The account would also be transferred to the heirs by way of universal succession. The court stated that neither the secrecy of telecommunications nor the post-mortem personal right to privacy stand in the way of heredity.

In a testamentary disposition, orders should also be made with regard to the digital assets. It should be noted in particular that the heirs must also be given access to the digital assets, for example by deposition of the corresponding passwords.

As the German civil law system does not acknowledge the concept of trusts in its own right, trusts are not an estate planning vehicle in Germany.

The private law foundation (Stiftung bürgerlichen Rechts) takes a rather prominent role in the German tax and estate planning regime. This is especially true for the family foundation (Familienstiftung), which is not an own legal form but rather a private benefit foundation focused on beneficiaries that are related to the founder of the foundation. In addition to the regular tax burden of a private benefit foundation, a backup inheritance and gift tax is levied on the estate of the family foundation every 30 years, pursuant to Section 1 (1) No. 4 IGTA.

Another important structure for tax and estate planning is the limited partnership (Kommanditgesellschaft).

As the German civil law system does not acknowledge the concept of trusts in its own right, trusts are not an estate planning vehicle in Germany.

Treatment of Trusts

Germany is not a member of the Hague Trust Convention and thus has not ratified the provisions of the agreement. The German treatment of trusts is typically determined by analogising the trust in question to some other legal arrangement recognised under German law. The task of the analogising procedure contains the search for “similar” or comparable legal structures that can be used for estate planning purposes in the German jurisdiction instead of a trust. The analogising procedure is mainly influenced by the specific trust structure:

Testamentary trusts

If German succession law applies to the decedent’s estate, it is not possible to establish a trust mortis causa or to bequeath parts of the estate to an existing trust. In such a case, especially when the testator has established a last will under foreign laws together with a testamentary trust, the trust arrangement will be regarded as German executorship, and the trustee will be regarded as executor and not as heir/legatee. The trust beneficiaries will be regularly treated as heirs/legatees (see von Oertzen/Stein/Reich, ZEV 2013, 109).

Inter vivos trusts

Two different views are taken in Germany with respect to inter vivos trusts. According to one view, they are legal institutions similar to a contract for debt (Schuldvertrag), in which case the principles of the international law of contracts for debt pursuant to the EU Regulation on the law applicable to contractual obligations (Rome I) analogously apply to the contractual obligation (schuldvertragliches Verpflichtungsgeschäft). Thereby, an inter vivos trust could also be created by German nationals serving as settlors. Another more restrictive view considers the trust to be a legal institution under corporate law, in which case the link will be the same as under international corporate law.

As the trustee's function in a trust is solely of a fiduciary nature with no own interest in the estate and the income of the trust, the mere appointment of a German citizen to serve as a trustee will, as a rule, have no tax consequences.

Place of business management in Germany 

However, if the trustee conducts business in Germany, the place of business management (see Section 10 GFC) might be in Germany. Consequently, the trust itself will be considered a corporation with unlimited tax liability according to Section 1(1) No 5 CITA; as a result, all worldwide income gained by the trust will be subject to German corporation tax. Similarly, an unlimited tax liability will be established regarding gift and inheritance tax according to Section 2(1) No 1 lit d) IGTA (see Section 2(1) No 2 IGTA when a family foundation is concerned). Ultimately, if the place of business management is established outside of Germany again, a taxable disjunction of trust assets can be triggered.

For tax purposes, the distinction of whether the concrete trust is a fiduciary arrangement or a separate legal entity must be made. The tax implications for beneficiaries are the following:

Fiduciary Arrangement (Conduit)

The entire property and the trust income are attributed to the settlor, who has to file income tax returns personally. Distributions from the trust to the settlor are not subject to income and gift tax, so that in this case there are no reporting obligations.

If the settlor directs the trustee to distribute assets to beneficiaries, such gifts have to be displayed by the settlor, the beneficiary concerned and also the trustee as asset manager, according to Section 30(1) IGTA in connection with Section 34(3) GFC.

Trust as Separate Legal Entity

The creation of a testamentary trust triggers inheritance tax pursuant to Section 3(1) No 1 IGTA. As manager of the trust assets, the trustee is obliged to file an inheritance notification to the German tax authorities, according to Section 30(1) IGTA in connection with Section 34(3) German Tax Procedure Act. In the creation of an inter vivos trust, the settlor and also the trustee are obliged to file a gift notification.

In case of distributions from the trust to the settlor and/or the beneficiaries, the persons concerned have to file income tax returns (regarding income pursuant to Section 20(1) No 9 ITA) and also gift tax returns (regarding gift pursuant to Section 7(1) No 9 IGTA). The trustee as asset manager is obliged as well.

If the trust fulfils the prerequisites for the unlimited or limited corporate income tax liability pursuant to Section 1(1) or Section 2(1) of the CITA, the trustee is obliged to file a notification pursuant to Section 137 German Tax Procedure Act after trust creation, and has to file corporate income tax returns annually.

Family Trusts within the Meaning of FTA Section 15 (Special Tax Regime for Undistributed Income)

Scope of application

Section 15 of the FTA contains a special income tax regime for foreign so-called family foundations that are not subject to taxation of worldwide income and thus could be utilised to shelter income from taxation.

Foreign family foundation

A foreign family foundation is defined as an entity that has neither a registered office (Satzungssitz) nor a place of effective management in Germany, and was created to benefit the members of a family. The latter requirement is fulfilled if more than one half of the foundation’s property and income is set aside for the founder and/or his relatives (Section 15 (2) FTA). In Section 15(1) of the FTA, a proportionate share of the foundation’s income is included annually in the income of the settlor or those beneficiaries and remaindermen who are German residents. Section 15(4) of the FTA extends this taxation mechanism to foreign “pools of assets” that were set up to benefit a family as required by Section 15(2) of the FTA.

Application to trusts

In a decision in 1992, the Federal Fiscal Court applied Section 15(4) to a Jersey trust, in which the trust’s income was allocated to the settlor, who was still alive, and a German resident (Federal Fiscal Court, decision of 5 November 1992 – I R 39/92) and, in a decision of 2 February 1994, the Federal Fiscal Court applied Section 15(4) to an US testamentary trust, in which the trust’s income was allocated to the beneficiaries living in Germany (Federal Fiscal Court, decision of 2 February 1994 - I R 66/92). The court held that the trust had been created for the benefit of the settlor’s wife and children, and was thus comparable to a family foundation and subject to the special taxation regime in Section 15 of the FTA. As a result, the trust’s worldwide income was included in the settlor’s income for the taxable year.

If a German resident becomes a discretionary beneficiary of a trust and is benefited by more than one half of the trust’s property and income (alone or together with other family members), the trust will qualify as a family foundation within the meaning of Section 15(2) of the FTA. Thus, its worldwide income will be allocated to the settlor if the settlor is resident in Germany and will therefore be subject to German taxation. If the German resident is only a beneficiary together with other (non-German) beneficiaries, then the beneficiary is exposed to taxation on the undistributed income on a pro rata basis.

Exemption for EU/EEA Trusts

Section 15(6) of the FTA excludes family foundations that have their registered office or place of effective management in EU/EEA member countries from the special taxation regime, provided that the trust’s property is extracted from the power of disposition of the settlor and his relatives, and that Germany and the respective state have entered into a certain exchange of information agreement.

Typically, the place of management of a trust is with the trustee. Nevertheless, when determining the place of management of a trust, one should also consider the rights and duties of a protector’s committee, if one exists. It is a subject of debate whether or not Section 15(6) of the FTA is applicable to a trust that also has a registered office or place of management within the EU/EEA.

Tax consequences and taxation regime pursuant to Section 15 FTA

In accordance with the special taxation regime established by Section 15 of the FTA, which is applicable if the place of effective management of the trust is not located in Germany, property and (positive) income (negative income cannot be allocated to the settlor/beneficiary – see Section 15(7) sentence 2 FTA) of the family trust are attributed to the beneficiary on a pro rata basis if the beneficiary is a German resident. As long as the beneficiary is alive and the trust income accumulates to the trust, the trust income – as determined by German tax law – is added to the taxable income of the beneficiary on a pro rata basis. The beneficiary is entitled to a foreign tax credit with respect to foreign income taxes paid on the income by the trust (see Section 15(5) FTA). The trust income is included in the taxable income of the beneficiary in the taxable year in which the income arises, under general income tax rules on the level of the trust. Distributions of accumulated trust income that was subject to taxation in a prior year are not taxed a second time, pursuant to Section 20(1) No 9 of the Income Tax Act.

If the trust qualifies as a foreign family trust within the meaning of Section 15 of the FTA, which is not exempt under Section 15 (6), its property and income are attributed to the beneficiary on a pro rata basis and added to their taxable German income. 

According to Section 20(1) of the FTA, double tax treaties cannot prevent the allocation of income pursuant to Section 15(1) of the FTA. However, distributions of accumulated trust income that have been taxed under Section 15 will not be taxed a second time when distributed to the German beneficiaries, according to Section 20(1) No 9 of the ITA. Nevertheless, gift tax will arise in cases where the beneficiary has not made or cannot make use of the election right provided by Article 12 Section 3 of the US/German Estate and Gift Tax Treaty.

Distribution of Income or Capital to German Residents

Furthermore, the distribution of income or capital of the trust to a German beneficiary may trigger income tax as well as gift tax.

German income taxation

Generally, distributions of foreign irrevocable trusts are subject to German income tax pursuant to Section 20(1) No 9 of the ITA. This is true with regard to periodic or ad hoc distributions of trust income, as well as distributions of trust property (repayment of capital). Only repayments at the expense of the tax contribution account in terms of Section 27 of the CITA are not taxable. However, trusts resident in third countries like the United States cannot refund distributions at the expense of the tax contribution account. 

Such distributions are taxed under the final flat-tax regime (withholding tax on capital gains) at a rate of 25% (plus solidarity surcharge and, if applicable, church tax) of the fair market value of the distributed assets. Due to this law, not only income but also trust corpus is income taxable when distributed to a German beneficiary or remainderman. 

A distribution from a foreign irrevocable trust to the German beneficiary or remainderman is not taxed under Section 20(1) No 9 of the Income Tax Act if the relevant income was already attributed to the German beneficiary under Section 15 FTA.

German Gift Tax

The distribution of trust property to the remaindermen also constitutes a taxable gift under Section 7(1) No 9 IGTA if the remainderman is a resident of Germany. 

Section 7(1) No. 9 IGTA applies to distributions upon the dissolution of testamentary as well as inter vivos trusts. It also applies to distributions of property from a trust that continues to exist, although the statutory language may imply otherwise. The wording of Section 7(1) No 9 Sentence 2 IGTA is as follows: “Transfers upon the dissolution of a foreign pool of assets, having the purpose of segregating property, as well as transfers to intermediate beneficiaries during the existence of the pool of assets ... are deemed to be a taxable gift.” Although the term “intermediate beneficiaries” (Zwischenberechtigter) is not defined, the majority of commentators construed it to include any distribution of trust income or trust property to any beneficiary or any remainderman during the existence of the trust. This was also the view of the Federal Fiscal Court (Federal Fiscal Court, decision of 27 September 2012 - II R 45/10). 

New decision regarding foreign family foundations

In a new decision with regard to foreign family foundations, the Federal Fiscal Court interprets the concept of the intermediate beneficiary much more narrowly (Federal Fiscal Court, decision of 3 July 2019 - II R 6/16). An intermediate beneficiary is any person who, irrespective of a specific resolution on a distribution, is legally entitled to the assets tied up in the trust or foundation and/or the income generated by the entity, whether - according to German legal concepts - in the form of rights in rem or in the form of claims under the law of obligations. This means that not all recipient can be regarded as intermediate beneficiaries, but only those who are legally entitled to the grant like in a strict trust situation. This must apply to a trust in the same way as to a foreign family foundation. In this new decision, the Federal Fiscal Court also refers to the decision from 2012 and clarifies that the beneficiary in the earlier case had a legal position which could not be revoked, so that it would also have to be regarded as an intermediate beneficiary under the new decision.

Consequently, only those grants pursuant to Section 7(1) No 9 IGTA can be taxed which are received by a beneficiary who has a legal claim to these grants from the outset. It is clear that the gift tax than arises on the actual receipt of trust income or trust property by the recipient of a discretionary trust. In Section 15 (2) Sentence 2 of the IGTA, family relationships are taken into account in determining the applicable tax rate. Depending on their proximity to the decedent or settlor, beneficiaries and remaindermen can qualify for either class I or class III of the gift tax rate system. However, the determination of the tax rate class can pose difficulties if the trust property was contributed by different persons.

The Federal Fiscal Court ruled also that the distribution from a foreign foundation are only taxable as gifts under Section 7(1) No. 1 IGTA if they clearly violate the purpose of the statutes (Federal Fiscal Court, decision of 3 July 2019 - II R 6/16). This is because a gratuitous transfer within the meaning of Section 7 IGTA can only be assumed if the distribution clearly exceeds the statutory purpose of the foreign foundation. With regard to the question of whether a distribution pursues the purpose of the articles of incorporation, there is a foundation-internal assessment prerogative, which restricts an examination by the tax office and/or tax court accordingly.

Double Taxation

As highlighted above, trust distributions can trigger income tax as well as gift tax simultaneously. Pursuant to Section 35b ITA, inheritance tax can be credited against German income tax if triggered by inheritance but not by donation. However, German tax law provides for neither a credit of the income tax paid by the beneficiary on the gift tax, nor vice versa, although in 2014 the Federal Fiscal Court expressed doubts about the double taxation of distributions from a foreign foundation to its beneficiaries with income and also gift tax.

The Court ruled that one uniform procedure like a distribution cannot be regarded as income and simultaneously as gift (Federal Fiscal Court, decision of 21 July 2014 - II B 40/14). The Munich Tax Court ruled in 2019 that there is neither inadmissible double taxation nor unconstitutional overtaxation if interest and dividends distributed by the trust are subject to gift tax in the case of the intermediate beneficiary in accordance with Section 7(1) No 9(2) IGTA and subject to the income tax as an additional amount in accordance with Section 15(1) FTA (Tax Court Munich, decision of 15 May 2019 - 4 K 2033/16). A final decision on this matter must now be made by the Federal Fiscal Court, where the appeal against the ruling of the Munich Tax Court is pending (II R 31/19).

In a certain amount retaining control for a settlor of a private foundation is possible. Nevertheless, retaining too much control can lead to the result that the settlement or foundation is treated as a sham or fiduciary structure especially in trust cases or when foreign foundations are involved.

The most popular methods for asset protection are pre- and postnuptial agreements, family foundations and partnership structures.

Marriage Agreement

With a marriage agreement, it is also possible to transfer assets from one spouse to the other without taxes, removing the assets from the reach of creditors by doing so.

Assets that are transferred to a family foundation have left the property sphere of the founder and are attributed to the foundation itself. In order for this effect to occur, it is a prerequisite that the founder has actually given up control over these assets, which is in turn assumed by the entities of the foundation. Additionally, it is advisable for the founder to have no means of influencing the entities of the foundation with regards to this property. Assets that are successfully transferred are exempt from being accessed by any creditors of the founder.

Partnerships

Partnerships are often used (depending on the type of assets) in order to transfer wealth to the next generation but at the same time retain a degree of control over the gifted assets.

See 2.6 Transfer of Assets: Vehicle and Planning Mechanisms.

Fair market value is not adjusted for tax purposes: the partial interest will be valued with the current market value of the underlying assets. Nevertheless, it is disputed within legal literature whether a discount would be necessary. 

Probate arbitration and mediation are considered in solving wealth disputes, as an alternative to probate litigation. 

An effective way to avoid long and costly probate disputes is to establish an arbitration clause in a last will. This clause is usually combined with a no-contest clause.

There is no special mechanism for compensation in wealth disputes.

The use of corporate fiduciaries is not prevalent in German law.

Piercing the veil of a trust or foundation is unusual. Nevertheless, if a trust or foundation is regarded as a mere fiduciary agreement, the veil can be pierced and income as well as capital of the trust will be attributed to the settlor or – in more rare cases – to the beneficiaries.

The prudent investor rule is applicable to a fiduciary as well as an investment adviser.

There are only very few investment theories or standards in this field in the German jurisdiction. The Tax Court Munich (decision of 25 April 2016 – 7 K 1252/14) held that non-profit corporations are largely free to choose their investments. They may choose any form of investment that is economically reasonable, applying an ex ante perspective.

In general, German citizenship can be awarded automatically by law or upon the request of an individual by administrative act.

By law, German citizenship will be passed to children by way of kinship if one of the parents of the child is a German citizen. Another way of obtaining German citizenship is by way of adoption by at least one German citizen.

With certain prerequisites, citizenship can be acquired by administrative act if a person has immigrated lawfully to Germany and has had his habitual abode in Germany for longer than eight years. The same applies if an individual is willing to abandon his former citizenship and has a spouse or a registered partner with German citizenship. Alternatively, citizenship can be acquired if the individual has custody of a child that has German citizenship.

Tax Residency

German tax residency may be obtained by maintaining a dwelling in Germany or by staying in Germany and the stay is not merely temporary (generally a stay of six months without interruptions suffices).

COVID-19

COVID-19 may have an impact on citizenship if applicants have to stay more than six months abroad since this may stop the necessary eight years habitual abode period. Likewise, tax residency may be affected by the current travel restrictions.

Citizens of the European Union will be treated favourably in obtaining German citizenship as a result of the unity principle promoted by the EU. 

On the one hand, they will not need to acquire a residence permit but are able to acquire it automatically if an application is filed with the responsible authorities. On the other hand, citizens of the EU are not required to drop their previous citizenship when obtaining German citizenship, thus gaining dual citizenship. Otherwise, EU citizens are held to the same standards as citizens of other countries and thus the COVID-19 travel restrictions may have an impact due to the necessary eight years habitual abode period.

A last will can be designed to focus especially on the needs of disabled children. In these cases, parents tend to consider specific provisions that ensure full support of the disabled child by state subsidy after their death, while keeping the estate itself untouched with regards to the day-to-day support of the child. This objective is reached by pairing a preliminary/posterior heirship (Vor- und Nacherbschaft) with an executorship.

Appointing a guardian, conservator or similar party requires a court proceeding and ongoing supervision by the court. The district court as family court has the function to appoint guardians for minors (Vormund) or for adults with disabilities (Betreuer). The guardian is under supervision of the court and is especially obliged to file financial reports.

The social insurance system in Germany includes mandatory nursing care insurance, which provides coverage in the event of an individual becoming care dependent. The coverage of this insurance is determined by the level of the individual's dependency on care.

German Courts are increasingly dealing with maintenance issues, where parents demand maintenance payments from their children. 

To avoid court-supervised care of a parent in case of mental incapacity or the like, it is common to appoint a child as attorney-in-fact, thus taking necessary and provisionary steps in these cases (Vorsorgevollmacht) without court supervision. However, such a power of attorney can only be established as long as the principal is still fully capable of acting in his own right. In this context, problems may arise, particularly in the event of dementia. The power of attorney may be revoked at any time.

A patient decree (Patientenverfügung) is usually drawn up together with a power of attorney.

In German tax and civil law, children born out of wedlock and adopted children are treated in the same way as children born in marriage.

Since 1 October 2017, same-sex marriages have been recognised in Germany; previously, it was possible to enter into a so-called registered partnership (eingetragene Lebenspartnerschaft). It is possible to have registered partnerships that were closed before this date retroactively converted into a marriage. 

Additionally, German registered partners are treated equally to other spouses regarding inheritance and gift taxation. Following a recent ruling of the Federal Constitutional Court of Germany, the same is true in the field of income taxation.

Due to the high reliefs under the German income and inheritance and gift tax regime, structuring non-profit organisations can be a good way to combine private clients’ charitable interests with a favourable tax planning. 

Tax Reliefs

In general, tax reliefs are available for organisations that have tax-privileged purposes – ie, purposes that are in the public interest (defined as advancing the material, spiritual or ethical wellbeing of society), benevolent or religious. The statutory list of purposes in the public interest found in Section 52 of the German Fiscal Code is broad and includes (among other categories) the advancement of science, art, caring for the young or elderly, education, conservation, social care, caring for victims of persecution, promoting international understanding, accident prevention, animal welfare, international development, consumer protection, promotion of equal rights, and sport.

The local tax office has jurisdiction to decide whether a particular organisation has tax-privileged purposes. If so, the organisation is exempt from most taxes (except insofar as it carries out a commercial activity not directly related to its tax-privileged purposes). 

Tax Reliefs for Donors

Individuals can claim a tax deduction in respect of gifts to tax-privileged organisations of up to 20% of their income. In addition, an individual can deduct up to EUR1 million in any ten-year period in respect of contributions to the endowment of a tax-privileged foundation – ie, gifts of capital in respect of which the foundation may only distribute the income. A gift for tax-privileged purposes is free of inheritance tax.

These tax reliefs have historically only applied to donations to German organisations. However, in the case of Hein Persche v Finanzamt Lüdenscheid (C-318/07), the European Court of Justice held that the denial of an income tax deduction for a gift to a charity elsewhere in the EEA was contrary to the principle of free movement of capital under Article 56 of the EU Treaty. New legislation to allow the deduction of gifts to charities in other EEA member states for income and corporation tax purposes has therefore passed.

However, such gifts continue to be subject to gift tax unless a mutual recognition arrangement is in place, the applicable double tax treaty provides otherwise or it is possible to structure the donation as a restricted gift, the use of which for exclusively charitable purposes is secured.

Structuring charitable organisations plays a significant role in German tax and estate planning. Charities can be set up in a variety of legal forms, including foundations, corporations and associations. 

Flick Gocke Schaumburg

Flick Gocke Schaumburg
Friedrich-Ebert-Anlage 49
MesseTurm
D-60308 Frankfurt a.M.

+49 69 717 030

+49 69 717 03 100

christian.von-oertzen@fgs.de www.fgs.de
Author Business Card

Trends and Developments


Authors



Flick Gocke Schaumburg has a total of seven offices in Germany (Bonn, Frankfurt am Main, Hamburg, Berlin, Munich, Stuttgart and Düsseldorf), as well as a representative office in Switzerland (Zurich). With more than 40 years' experience in the field, the firm combines outstanding expertise in German and international tax law with specialist know-how in other relevant areas of business law. Flick Gocke Schaumburg advises on national and international mergers and acquisitions, disposals, venture capital and private equity transactions, and complex restructurings, also providing comprehensive advice to high net worth individuals, family-owned businesses, foundations and not-for-profit organisations on all tax and legal issues related to wealth management and succession; at present, the firm's client roster is in excess of 2,000, including the majority of the DAX-listed companies. In terms of tax crime and white-collar matters, Flick Gocke Schaumburg covers the entire spectrum from risk assessments to representation in criminal proceedings.

Private Wealth Trends and Developments in Germany

Transfer of businesses: importance of German foundations still grows

Family companies and partnerships have always been the backbone of the German economy. Therefore, German succession, company and gift and inheritance tax law is very favourable for transferring these kinds of assets.

However, within the last years the tax exemptions for business assets have been restricted, in particular for significant fortunes (value of transferred business assets per heir/donee above EUR26 million). As a consequence, the already popular German private foundation (Stiftung) has become an even more popular estate planning option. There are more than 23,000 foundations in Germany.

The transfer of assets to a charitable foundation is exempt from gift and inheritance tax and the transfer of significant business assets to a family foundation using the tax exemption for business assets is also still possible and more and more used.

Difficult transfer of business assets during COVID-19

Due to the COVID-19 crisis, estate planning concerning business assets faces several problems. The 85% gift and inheritance tax relief for companies with more than 15 employees is subject to the condition that the total sum of salaries paid during a period of five years is at least 400% of the annual average for the five years before the gift or inheritance. In case of the 100% tax relief, the total sum of salaries is increased to 700% during a period of seven years.

However, it is to be expected that millions of employees will be unemployed or on short-time work during the crisis. In order to soften the drastic economic consequences of COVID-19, the German government has increased its short-term work money programme. According to this programme, employees receive 60% (and in some cases more) of the salary they have earned before the crisis even if they have to temporarily stay home or if their working hours are drastically reduced.

The German government covers a vital part of the shortfall. Nevertheless, it will be difficult to uphold the previous employment levels as required for the tax exemption for business assets.

Valuation consequences

A positive consequence of COVID-19 for estate planning purposes is that the value of the company or partnership decreases which in principle results in a lower tax burden. However, the value of the enterprise is also the basis for determining the ratio of the business assets and the so-called administrative and financial assets included in the business assets. Administrative and financial assets do not benefit by the tax relief.

Furthermore, the higher the value of the enterprise the better this ratio is for gift and inheritance tax purposes since a small percentage of administrative and financial assets is helpful on a variety of tax calculation levels. Moreover, capital contributions to the company due to the crisis two years prior to the transfer of the business assets are subject to gift and inheritance tax in the moment of the transfer as these capital contributions also qualify as financial assets. Hence, it is advisable to outwait the crisis for any transfers of business assets.

Possible drastic gift and inheritance tax consequences in case of insolvency

Tax-exempt transfers of business assets prior to the crisis may even lead to gift or inheritance taxation with retroactive effect if within five years (85% tax relief) or seven years (100% tax relief), respectively, after the transfer, the company files for insolvency.

Transfer of non-business assets during COVID-19

For German gift tax purposes, the value of assets at the moment of the gift is decisive. Therefore, if stock prices are low for a short period of time, this could be an interesting moment for gifting stocks and comparable assets. In case of gratuitous transfers, the historical acquisition costs of the donor are transferred to the donee for capital gains tax purposes and thus the donee may sale the stocks capital gains tax free in case of rising prices after the crisis.

Transfer of real estate during COVID-19

COVID-19 also has an impact on the valuation of real estate. In case of gratuitous transfers, three valuation methods depending on the type of the real estate are generally applicable: the sales comparison method (taking into consideration the recent sale of comparable properties in the area), the income capitalisation method (on the basis of the rental income earned in the building) and the cost method (adding the value of the land and of the costs of the building). However, these methods do not take into account future developments but only historical circumstances. Therefore, the valuation according to these methods adapts with a time lag. Moreover, according to the income capitalisation method only the agreed but not the actually paid rental income is decisive.

German non-profit organisations

The creation of charitable organisations, in particular foundations, is common among wealthy individuals in Germany, also owing to the changes in the German gift and inheritance law. In some cases, these foundations are majority shareholders of enterprises with several thousand employees and thus dispose of considerable fortunes. Charitable foundations, however, are subject to various restrictions of German foundation and charitable law.

Regarding German foundation law, a draft bill for discussion purposes has been introduced in 2018 aiming at modernising German foundation law. This draft bill has received various amendments and surely the German foundation law will undergo a modernisation soon, including a further harmonisation on the federal level (each Bundesland has its own foundation law) and a more liberal asset management.

Taxation of trusts in Germany

Germany has always struggled with common law trusts. German civil law does not recognize trusts since Germany is not a member of the Hague Trust Convention and has not ratified the provisions of the agreement. German gift and inheritance tax law as well as income tax law, however, recognises trusts, even though they are described as “pool of assets, governed by foreign laws and aiming on the binding of assets”.

The taxation of trusts is rather severe in Germany, especially in case of distributions from the trust to beneficiaries in Germany. A German local tax court held in May 2019 that distributions from an irrevocable US trust to a German-based beneficiary are exposed to gift tax, even if the beneficiary was subject to German income taxation on the undistributed income of the trust. This case is still pending at the Federal Fiscal Court.

However, court rulings may become more favourable for trusts and their beneficiaries as the Federal Fiscal Court stated in July 2019 that during the existence of a foreign foundation (and thus probably also of a trust), any distribution of trust principal or income to a beneficiary or remainderman in Germany, not having a legal claim to the assets is not subject to German gift tax. The Bavarian tax authority has confirmed the opinion expressed by the Federal Fiscal Court by a letter dated 5 March 2020. Hence, there is a moderate hope that German trust taxation will become less hostile for beneficiaries in Germany.

More reporting obligations and transparency

Starting in July 2020, there is a reporting obligation for cross-border tax arrangements in Germany. However, there is already a reporting obligation for cross-border tax structures if the first step has been or will be implemented between 25 June 2018 and 30 June 2020. These structures must be reported by the end of August 2020. In a process of harmonising the reporting obligations within the EU, the German law implements the respective EU Directive of 25 May 2018. The extent of the reporting obligations is still highly disputed in Germany. The German Federal Ministry of Finance is still working on a white list.

In 2017, the German Anti-Money Laundering Act was amended implementing the respective EU Directive of 20 May 2015 and introducing a German transparency register. German registered commercial partnerships and legal persons governed by German private law as well as Germany based trustees have to report their beneficial owners or beneficiaries if the facts regarding the beneficial ownership are not publicly accessible in other registers. Implementing the respective EU Directive of 30 May 2018, the information reported to the German transparency register is publicly accessible since 1 January 2020.

Therefore, due to the implementation of EU law in Germany, the reporting and transparency obligations in estate planning matters have largely increased within the last years.

Flick Gocke Schaumburg

Flick Gocke Schaumburg
Friedrich-Ebert-Anlage 49
MesseTurm
D-60308 Frankfurt a.M.

+49 69 717 030

+49 69 717 03 100

christian.von-oertzen@fgs.de www.fgs.de
Author Business Card

Law and Practice

Authors



Flick Gocke Schaumburg has a total of seven offices in Germany (Bonn, Frankfurt am Main, Hamburg, Berlin, Munich, Stuttgart and Düsseldorf), as well as a representative office in Switzerland (Zurich). With more than 40 years' experience in the field, the firm combines outstanding expertise in German and international tax law with specialist know-how in other relevant areas of business law. Flick Gocke Schaumburg advises on national and international mergers and acquisitions, disposals, venture capital and private equity transactions, and complex restructurings, also providing comprehensive advice to high net worth individuals, family-owned businesses, foundations and not-for-profit organisations on all tax and legal issues related to wealth management and succession; at present, the firm's client roster is in excess of 2,000, including the majority of the DAX-listed companies. In terms of tax crime and white-collar matters, Flick Gocke Schaumburg covers the entire spectrum from risk assessments to representation in criminal proceedings.

Trends and Development

Authors



Flick Gocke Schaumburg has a total of seven offices in Germany (Bonn, Frankfurt am Main, Hamburg, Berlin, Munich, Stuttgart and Düsseldorf), as well as a representative office in Switzerland (Zurich). With more than 40 years' experience in the field, the firm combines outstanding expertise in German and international tax law with specialist know-how in other relevant areas of business law. Flick Gocke Schaumburg advises on national and international mergers and acquisitions, disposals, venture capital and private equity transactions, and complex restructurings, also providing comprehensive advice to high net worth individuals, family-owned businesses, foundations and not-for-profit organisations on all tax and legal issues related to wealth management and succession; at present, the firm's client roster is in excess of 2,000, including the majority of the DAX-listed companies. In terms of tax crime and white-collar matters, Flick Gocke Schaumburg covers the entire spectrum from risk assessments to representation in criminal proceedings.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.