Cross-border Tax Group

Abstract

The tax group for income tax purposes enables the income of a subsidiary to be attributed to the income of a parent company for corporate income tax and trade tax purposes. This makes it an important institution in German tax law, but in the cross-border case it harbors many ambiguities and problems. In this paper, therefore, the potential case constellations of a cross-border tax group are identified and examined for the possibility of forming a tax group. At the beginning, a brief description of the prerequisites and legal consequences of the tax group is given. Subsequently, a distinction is made between an inbound and an outbound situation as well as between a foreign domicile in an EU or EEA state and a foreign domicile in a non-member state. In particular, the problem areas in which the domestic application of law conflicts with EU case law are adressed. The results show that the ECJ case law has so far only been implemented by German courts to a limited extent. This leads to a legal situation which is to be classified as contrary to EU law, but which will probably only change through proceedings before the ECJ.
Keywords: Organschaft; § 14 KStG; internationale Gruppenbesteuerung; Niederlassungsfreiheit.