At the turn of the year 2021, the tax authorities once again tightened the notification requirements for international relationships with immediate effect. The indirect acquisitions of foreign holdings are particularly affected by the new regulation.
Taxpayers with their place of residence, habitual residence, management or head office in the area of application of this law (domestic taxpayers) have the tax office responsible for them in accordance with Section 138 (2) No. 3 of the Tax Code (AO) to acquire or sell interests in a corporation, To notify an association of persons or assets with their registered office and management outside the scope of this Act if this results in a participation of at least 10 percent in the capital or assets of the corporation, association of persons or assets or if the total cost of all investments is more than 150,000 euros. This does not apply to the acquisition and sale of investments of less than 1 percent in the capital.
This notification obligation according to § 138 paragraph 2 sentence 1 number 3 AO only exists if the relevant participation limits are reached or exceeded when acquiring a participation (for the first time or again after falling below the limit in the meantime).
The notification obligation also includes the acquisition of indirect holdings. If the prerequisites are met, the obligation to notify exists only for participations that the domestic taxpayer has acquired for or free of charge. In the event of the acquisition of a direct stake in a corporation, association of persons or assets, the domestic taxpayer must also report the indirect stakes acquired at the same time, provided the other requirements for this are met.
The sale of a participation is notifiable according to §138 paragraph 2 sentence 1 number 3 AO if the acquisition costs of all participations sold exceed 150,000 euros or at least a 10 percent participation is sold. If these prerequisites are met, the obligation to notify exists only for the direct holdings that the taxpayer himself has sold and, as a result, indirect holdings that are also sold at the same time.
Wheter or not there is a notification obligation must therefore be reviewed carefully in each individual case. Please contact us as your experts for international tax law. Please find further information to international tax law here on our website. In case of any questions to corporate tax law please do not hesitate to contact us.