After accompanying several tax audits for different clients in the Property sector sit down Patrick Bubeck and Dr Tobias Stiegler in a current NWB essay deals with central legal issues relating to the taxation of property-holding partnerships.
There are several options for domestic and foreign companies, especially corporations such as GmbHs, when it comes to Structuring your property investments on. Flexibility in payment transactions, rapid liquidity, automatic consolidation of results or the avoidance of trade tax often lead (inter)national property groups to opt for transparent, asset-managing holding structures for their domestic property investments.
This form of investment structure entails increased tax complexity. Various legal questions arise regarding the determination of taxable profits at the level of the asset-managing property company and at the level of the parent or holding company, such as a management or financing holding company.
A key issue for property-holding, transparent holding structures is the offsetting of income tax losses within the group of companies. The so-called corresponding application of Section 15a EStG within the meaning of Section 21 (1) sentence 2 EStG is regularly the subject of disputes with the tax authorities. In this context, our two tax advisors take a view that differs from previous administrative practice and is based on recent judgements.
Entrepreneurs and investors who want to optimise their property structure for tax purposes should have the legal and tax framework carefully examined.
Yours TAXGATE team is at your disposal for the tax structuring of your property investments.
