The transaction will be structured as an asset deal and the acquired business will become part of Brenntag India, headquartered in Mumbai. The Lone Star Group ultimately took over the assets by way of an asset deal.
The granting of the unlawful and incompatible aid has hence been followed by a share deal and then two subsequent asset deals. This explains why the asset deal took place little after the share deal.
In the case of a partnership owning German real estate, the relevant period of 5 years will be extended to 10 years. Introducing of capital gains tax from the sale of shares in foreign corporations owning German real estate Amending of the determination of taxable capital gains for foreign companies selling German real estate directly Tightening German RETT on the sale of shares in companies owning German real estate New capital gains tax from the sale of shares in foreign corporations owning German real estate Capital gains derived by an individual or incorporated foreign shareholder from the sale of shares in a foreign or domestic corporation are expected to be subject to limited income tax liability in Germany. The legislature has leveraged real estate investments in mind, in which the creditor waives a loan. The new German government addressed this issue by incorporating it into its coalition agreement including future tax-policy goals and the measures to achieve them, including the tightening of the German RETT for direct and indirect transfers of shares in companies owning German real estate. Refine more Format Format.
The expansion of capital gains taxation derived from the indirect sale of German real estate has been a source of discussion for a long time. Looking to the future, German legislation is likely to amend domestic tax law as follows:.
Capital gains derived by an individual or incorporated foreign shareholder from the sale of shares in a foreign or domestic corporation are expected to be subject to limited income tax liability in Germany. From what we here, this will be the case if, at any time during the days preceding the sale, these shares derived more than 50 per cent of their value directly or indirectly from real estate situated in Germany but only if the seller owned the shares at that time.
However, the new capital gains tax also seems to apply to situations in which the real estate company had already sold its real estate before the sale of its shares.
Germany would thus tax not only the profits from the sale of the real estate, but also for the shares in the former real estate company for a further year. The new capital gains tax will affect share deals taking place after December 31, More importantly, the new capital gains tax will be limited to the portion of the fair market value that to be added only after December 31, To avoid disputes with the German tax authorities on the valuation of the business and the valuation of German real estate close to the end of , the investor could consider selling some shares to a third party in to document the fair market value at that time.
In other words, Germany has a taxing right for such capital gains under its tax treaties.
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Thus, it has not yet been integrated into German tax treaties. Nevertheless, it is expected that Germany will amend approximately one-fifth of its tax treaties accordingly by implementing the Multilateral Instrument in the near future. That said, if the foreign seller is not an individual but a corporation, the capital gains from the sale of company shares are tax exempt for corporate income tax purposes under German domestic law.
This view has also been taken by the German tax authorities and German tax courts. Previous price EUR 6. Previous price EUR Format see all Format.
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