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Tax law is as complicated and inscrutable as dense fog. Our team of experienced tax experts guides you through your tax issues and supports with practical information on the diverse and complex tax topics.

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Mobile working abroad

The legal framework is complex and must be carefully examined.

The little 1x1 of foreign assignments

Work assignments abroad require systematic and careful planning. With this information, the labour, tax and social law challenges can be mastered.

Taxation of plant construction projects

This article provides an overview of the latest developments and is intended to help avoid unnecessary tax burdens and double taxation in the area of corporate taxation.

Overview: Property tax reform in the federal states

Already at the end of 2019, the Bundesrat passed the legal basis for the reform of the property tax. The central element of the reform is the possibility for the federal states to develop their own approaches (so-called opening clause) for the necessary property valuation (deviating from the so-called federal model). In the following, we provide an overview of the implementation status in the individual federal states.

Publication "Tax Compliance Management Systems - Guide 2018".

Together with company representatives, the VDMA has created a signpost which contains practical implementation examples for the implementation of a Tax Compliance Management System.

Series transactions

As of 1.1.2020, new EU law on chain transactions was also implemented in Germany with § 3 para. 6a UStG-neu. However, the previous legal situation continues to apply to a large extent. In the following, the regulations will be presented in their entirety.

Deliveries of work and services for value added tax purposes

Deliveries of mechanical engineering are regularly deliveries of work and materials. However, the turnover tax has its own definitions which deviate from the civil law approach. The regulations are examined in more detail below.

The tax department offers seminars and events for member companies on current topics and tax issues, also in cooperation with the Mechanical Engineering Institute (MBI).

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Property tax reform in Hesse: The area factor method

Hesse will make use of the opening clause (Art. 72 Para. 3 S. 1 No. 7 GG) and introduce an area factor procedure.

Real Estate Transfer Tax Reform: The New Share Deal Regulations

After more than a year of deadlock, the governing parties have agreed on new regulations on share deals in the real estate transfer tax.

Reform of German withholding tax relief on royalty payments

Debtors of a foreign royalty payment are generally obliged to withhold tax. Up to now, the exemption procedure offered relief in this respect. This is now reformed by the new § 50c EStG.

Trade tax: crediting foreign withholding tax

Until now, the crediting of foreign withholding tax was only known in connection with income or corporation tax. The FG Hessen now affirms this possibility also for trade tax.

Changes in value added tax

With the turn of the year 2020/2021, a number of tax changes took effect, including depreciation, advance sales tax filing, and the Annual Tax Act.

Bundestag passes reforms to KStG and AStG

In its second and third reading, the Bundestag today passed a law to modernise corporate tax law and the law to implement the anti-tax avoidance directive.

Corona virus: Specific offers of the East German federal states

From contact persons to support programmes: In connection with the corona virus, the federal states have compiled regionally specific information and assistance for companies.

Company health support in wage tax

The Federal Ministry of Finance (BMF) has published an implementation guide on the tax recognition of employer benefits for workplace health promotion (§ 3 No. 34 EStG).

Property Tax Reform in Lower Saxony: The Area-Location Model

Lower Saxony will make use of the opening clause (Article 72 (3) sentence 1 no. 7 GG) and introduce an area-location model.

Medicine against the economic crisis: A growth-oriented tax system

The standstill in German corporate tax law has long been criticised. Gradually, Germany moved from the middle of the pack among industrialised nations to the top in terms of tax burden. At the same time, structural reforms have been piled up for years. But now the government can no longer stand by and watch.

BMF publishes application letter on the differentiation between cash and non-cash remuneration

With the BMF letter dated 13.04.2021, a position is taken on the differentiation of cash and non-cash wages. In doing so, a transitional regulation is created for the treatment of cash cards and vouchers.

Overview: Partial retirement and early retirement

In the following, we have compiled and answered the basic questions on these instruments for you.

New lists for reciprocity

As of 3/15/2021, the Federal Ministry of Finance has updated the lists for so-called reciprocity.

Definition of supply of work and services - extension of the transitional arrangement

The BMF has extended the transitional regulation in the letter dated 1.10.2020.

Government agrees on implementation of ATA-Directive

This bill introduces changes to the addition and subtraction taxation among others.

Bill on the modernisation of corporate tax law

On March, 24 2021, the members of the cabinet agreed on a bill to modernise corporate income tax law (KöMoG). Among other things, this bill brings the so called option model on the way.

Input tax refund 2020 Great Britain

If you still want to claim an input tax rebate for 2020 in the UK, you need to hurry!

Work assignments in Europe

In the case of work assignments within Europe, the three completely different topics of "reporting obligations", "social law: A1 certificate" and "labour law: posting directive" are increasingly coming into focus.

Home Office Abroad: Social Security Implications

A temporary change of place of employment due to the current pandemic may have an impact on the previously established social security law

DTA - Overview 2021

Overview of double taxation agreements and wage tax exemption for stays abroad

Reduction of the useful life of computer hardware and software

On 19 January 2021, the Conference of Minister Presidents not only took up the extension of the lockdown, but also a tax policy project from the coalition agreement.

New Regulation on loss carryback helps only half a percent of companies

In the view of the VDMA, the regulations on loss carryback contained in the Third Corona Tax Assistance Act should be improved. VDMA Vice President Bertram Kawlath explains on the second and third reading of the law in the Bundestag:

Brexit impact on sales tax

Export declarations will need to be prepared for supplies to the UK from January 2021.

Facts and figures: Time spent on tax returns

Minimum time a medium-sized business spends calculating its tax liability, filing tax returns, and remitting taxes

Documentation requirements for transfer pricing tightened up

On 3 December 2020, the Federal Ministry of Finance (BMF) published Administrative Principles 2020 (VG 2020) on obligations to cooperate and estimation of tax bases.

AAustria: Wage Tax Withholding Procedure for German Employers

It was not until 1.1.2020 that the wage tax withholding obligation for foreign employers in Austria was tightened. This has now been largely reversed - with retroactive effect from 1.1.2020.

Social security agreement: A1 certification of a different kind!

Germany has concluded social security agreements with a large number of countries outside the EU, which regulate the retention of the German social security system.

Expand loss carryback and create liquidity

Industries such as machinery and equipment manufacturing must make risky investments to maintain their competitiveness. In addition, they typically have a business that is subject to strong cyclical fluctuations. Therefore, it is imperative to have adequate ways to offset profits and losses, even across periods. Operating losses must not simply be allowed to lapse, but must be able to be offset in full against profits from good years.

Secure liquidity - prepare for recovery

Sufficient liquidity is currently a key prerequisite for companies to weather the Corona crisis well and build on past successes. Despite the extensive aid provided by the German government, there is still a lack of adequate loss offsetting possibilities.

Benefiting from research funding

The Tax Incentives for Research and Development Act (Forschungszulagengesetz) and the federal government offer many opportunities to receive funding.

Plant engineering

Companies from all over Europe are involved in the VDMA. Mechanical engineering is a familiar term to many, but what distinguishes plant engineering? The following pages show the diversity of the plant engineering sectors, the complexity of the project business, but also forward-looking solutions to meet the challenges of the time.

OECD Project: Base Erosion and Profit Shifting (BEPS)

The most important documents can be found here.

Technical services - Countries

Taxation of technical services: Tax law information and practical experience from the circle of members

Entrepreneurs will be able to reclaim VAT from bad debts in Slovakia as of 2021

According to several surveys, the payment discipline of Slovak entrepreneurs and customers is one of the worst in the EU. At the same time, the crisis (Covid-19) affects the payment discipline and liquidity of entrepreneurs very significantly.

Update Brexit - Social security for work assignments from January 2021 onwards

The protocol to the free trade agreement contains regulations (Social Security Coordination - SSC) which guarantee the cross-border mobility of employees.

BMF extends tax liquidity support in connection with the Corona crisis

Back in March 2020, various tax measures were taken to secure liquidity. After these measures were limited until the end of 2020, the BMF has granted an extension of these measures.

Research Allowance Act - Statutory amendment by the Annual Tax Act 2020

The governing parties have been arguing for a long time about the further content of the Annual Tax Act 2020. The coalition has also agreed on amendments to the Research Allowance Act (FZulG). The law was passed by the Bundesrat on December 18, 2020.

VDMA again pleads for an extension of the tax loss carryback

In a letter, VDMA President Karl Haeusgen has addressed the Minister Presidents of the German states and, on behalf of the VDMA, is once again calling for improvements to the tax loss carryback.

Property tax reform in Bavaria: Government draft submitted for area model

Bavaria will make use of the opening clause (Art. 72 para. 3 sentence 1 no. 7 GG) and introduce an area model. To this end, the state government has now presented a draft bill and also provided initial details in its press release of 8 December 2020. Bavaria thus deviates from the federal model

The Corona special payment - tax-free support benefits due to the Corona crisis for employees

Since June of this year, the possibilitie exists to pay out benefits in connection with the Corona crisis (also known as the Corona special payment or Corona bonus) to employees tax-free up to an amount of EUR 1,500. On the occasion of the planned extension of this regulation until the end of June 2021, we would like to briefly present the key points of this regulation.

Tax incentives for research: How does the instrument work?

The Research Subsidy Act came into force on 1 January 2020. Find out here who benefits from the new tax incentive, what you need to consider and how the VDMA supports you with this form of funding.

Securing liquidity - preparing for an upswing

Sufficient liquidity is currently a key prerequisite for companies to weather the Corona crisis well and build on past successes. Despite the extensive aid provided by the German government, there is still a lack of adequate loss offsetting possibilities.

To the point

To the point

Auf den Punkt Zitat Tax Department

"Germany urgently needs a corporate tax reform! On the one hand, to reduce the tax burden to an internationally conventional level, but on the other hand also to reduce bureaucracy!"

Petra Klingenstein, ABB Power Grids Germany AG, Chairwoman of the VDMA Tax Committee

Auf den Punkt Zahl Taxes

218

hours are required for companies

of medium size to calculate their tax liability, prepare tax returns and pay taxes in Germany as a minimum.

Source: PWC-Studie Bürokratiekosten der Steuererklärung

Auf den Punkt Zusammenfassung Steuern

Summary
Annual Tax Act 2020 - Innovations in Wage Taxation
  • Prolonged tax exemption for employer subsidies to short-time work remuneration
  • Legal clarification of the requirement of additionality for income taxes
  • New certification procedure for tax-free private health insurance subsidy

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Other VDMA Services
Committees of the Tax Department
Within our working groups, you will have the opportunity to exchange experiences with other companies on a wide range of topics and to actively participate in shaping major issues relating to taxation.
Newsletter following our specialist topics
Our topic-based newsletters contain valuable information on the latest developments and the most important decisions in the field of tax law.
Tax Database: Taxation of technical services
The taxation of maintenance, repairs, etc. performed abroad is becoming increasingly challenging. With this country-specific information, additional tax burdens can be avoided in advance.
Tax Database: Taxation of plant construction projects
The taxation of plant construction projects abroad is hardly a walk in the park. These country-specific resources provide an overview of the relevant tax framework.
Overview: Double taxation agreements
In addition to the permanent establishment period, the country overview contains information on the 183-day rule, which, among other things, governs the tax exemption for wages in Germany.
Transfer prices
The most important BMF letters are listed here.
OECD Projekt: Base Erosion and Profit Shifting (BEPS)
The most important documents can be found here.

Ausschüsse

[Ausschüsse]
Tax Committee
Steuerausschuss
In the Tax Committee, mainly heads of the tax/finance departments from the member companies discuss pending legislative projects and shape the VDMA's tax policy work

Vorsitzender

Petra Klingenstein

Hitachi ABB Power Grids AG

Geschäftsführung

Meißner, Ulrich

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Vorteilskommunikation

Benefits for you as a member

Largest industry network in Europe

Around 3,300 primarily medium-sized member companies in the capital goods industry make the VDMA the largest industrial association in Europe and the most important network organization in the industry.

Strong representation of interests

The VDMA is the most important voice of the mechanical and plant engineering industry. It represents the common economic, technical and scientific interests of the industry in Germany and around the world.

A wide range of services

More than 500 VDMA employees worldwide support you with practical services to make the right decisions in your company - along the entire value chain.