New circular letter on transfer of assets and partnership interests


Federal Ministry of Finance directs non-application of recent rulings by the Federal Fiscal Court.

With its circular letter dated 12 September 2013, the Federal Ministry of Finance comments on three rulings by the Federal Fiscal Court dealing with the transfer of assets and partnership interests. According to the circular letter, the Federal Fiscal Court’s rulings shall not be generally applied by the tax administration. Rather, the Federal Ministry of Finance will await the rulings of the Federal Fiscal Court in further pending cases.

The circular letter addresses the following issues:

• The Federal Fiscal Court had ruled that the transfer of an asset belonging to the so-called special business assets (Sonderbetriebsvermögen) of a partner to the assets of the partnership (Gesamthandsvermögen) against partial consideration (Teilentgelt) does not lead to a taxable realization of profits if such consideration does not exceed the book value of the asset (File No. IV R 11/12). If the partial consideration does not exceed the book value, the transfer is deemed to have been carried out without consideration.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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