BUNDESFINANZHOF Decision of 11/25/2015, II R 62/14
Previous instance: FG Nürnberg from 10/16/2014, 4 K 1059/13
Request for the Federal Ministry of Finance to join: Conditions for tax exemption under § 6a GrEStG

Guidelines
The Federal Ministry of Finance is requested to join the revision process and to comment on the relationship between § 6a sentences 3 and 4 GrEStG, according to which § 6a GrEStG is not applicable to transformation processes in which a legal entity ceases to exist or is newly formed (merger, division, spin-off, or asset transfer for new formation), in relation to § 6a sentence 1 GrEStG, which includes these transformation processes within the scope of the regulation by referring to § 1 para. 1 nos. 1 to 3 UmwG, and to comment on the possible aid character of § 6a GrEStG. ...

1. The decision of August 13, 2013, is amended such that the real estate acquisitions realized by the merger according to the appendix to the decision (Items No. 1 – 6.) are tax-advantaged to an extent of 100 percent pursuant to § 6a Sentence 1 GrEStG.

2. The costs of the proceedings shall be borne by the tax office.

3. The judgment is provisionally enforceable due to the expenses to be reimbursed to the plaintiff. The tax office may avert enforcement by providing security in the amount of the expenses to be reimbursed to the plaintiff, unless the plaintiff provides security in the same amount prior to the enforcement.

4. The appeal is permitted.

 

If the assets of the company being merged include real estate, then according to § 1 I No. 3 of the Real Estate Transfer Tax Act (GrEStG), real estate transfer tax generally also applies in the case of mergers by acquisition.

§ 1 stipulates the following:

Subsection (1) The following legal transactions are subject to real estate transfer tax, insofar as they relate to domestic real estate: ...

No. 3 the transfer of ownership when there is no prior legal transaction justifying a claim to transfer of title and no conveyance is required. …

The legislature has created exceptions in § 6a GrEStG for restructuring within a corporate group. If this exception applies, the real estate transfer tax may be waived.
In its decision of 16.10.2014, the Nuremberg Tax Court opened the applicability of the provision for parent-subsidiary mergers.   ...    

Frequently, the question arises whether two Limited companies can be merged. Usually, these are cases where the entrepreneur has established a parent company and a subsidiary, both in the form of a Limited, and now wishes to merge them into one entity. The English corporate law does not allow the merger of two Limited companies.

Entrepreneurial action is characterized by constant adaptation to changing conditions. This applies not only to the adaptation of products to new market developments, but often also to the adaptation of the legal form, that is, the form of the business entity.

Many entrepreneurs have chosen the Limited as their legal form in recent years, often for good reason. Just as varied as the reasons for choosing the Limited as a legal form are the reasons for moving away from it.

In general, there are two ways to transition from a Limited to a German GmbH. ...