NEW: the duty to report foreign investments is extended to naming the commercial activity of the investee.
Until recently, according to Art. 138 of the German Fiscal Code the taxpayer had to report investments in non-German corporations or private companies to the tax office only if the investment – a direct or an indirect one –
a) reaches 10% or more AND
b) amounts to at least 150.000 EUR.
Now, the COMMERCIAL ACTIVITY OF THE INVESTEE must ALSO be reported to the tax office, that is – it has to be included in the tax declarations (income tax and corporation tax). This must be disclosed to the tax office within 14 months after the investment had been realised or after the participation limit had been reached. This deadline is not prolongable. A failure to comply with this reporting regulation constitutes an administrative offence, which can be fined up to 25.000 EUR.
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MBA for Finance and Financial Services (UK), Steuerfachwirt (GER)