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DescriptionSection 1 (5) AStG is not a separate provision governing the allocation of profits between permanent establishments.
Effective January 1, 2025, China has introduced a new tax credit for foreign investors who reinvest distributable profits into eligible projects within the country. The policy will remain in force until December 31, 2028.
Mit Wirkung zum 1. Januar 2025 hat China eine neue Steuergutschrift für ausländische Investoren eingeführt, die ausschüttungsfähige Gewinne in förderfähige Projekte innerhalb des Landes reinvestieren. Die Regelung gilt bis zum 31. Dezember 2028.
The bill presented by the Federal Government for an immediate tax program to strengthen Germany as a business location has also been passed by the Bundesrat. The following now applies:
The VDMA's regional associations have a long tradition of organizing tax events. We will be offering these events again in the first half of 2024. We give you a small preview of when and where!
Bundesfinanzministerium legt Referentenentwurf für ein steuerliches Investitionssofortprogramm 2025 vor Die neue Bundesregierung will die steuerlichen Investitionsbedingungen zügig verbessern. Der nun vorgelegte Referentenentwurf (Anlage) soll wichti
On May 15, 2025, the Federal Ministry of Finance (BMF) published the "Fact sheet on cross-border audit cooperation with tax administrations of other countries and territories: joint and simultaneous audits and presence of officials".
Slovakia's new financial transaction tax also applies to foreign companies.
The US withholding tax is an essential part of the US tax system.
Italy currently offers companies interesting investment incentives for machinery and equipment. These are granted in an efficient form via tax credits, which can be offset against current tax and contribution payments.
Work assignments abroad require systematic and careful planning. This information will help you to master the challenges regarding labour, tax and social law.
The Federal Ministry of Finance has published an implementation guide for the new transaction matrix.
Starting too late can lead to delays in accounting and unexpected withholding tax deductions.
On April 3, 2025, the US government announced the introduction of a general 10% base tariff and 20% additional tariff on all imports, including those from Europe and Germany.
In economically difficult times, the VDMA supports its members with valuable information and personal advice. Together we will find the right course and strengthen the resilience of the companies.
Description
This article examines the principles of restructuring provisions under commercial and tax law as well as the requirements and special features of their formation in the tax balance sheet.
The most important regulations of the current legal situation on the subject of loss deduction in income tax, corporation tax and trade tax are summarized here.
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Germany continues to lose its attractiveness as a business location in international competition. This is also due to the high tax burden on small and medium-sized companies.
The VDMA has addressed extensive demands to politicians. What do the parties think? Our overview shows the extent to which the mechanical and plant engineering industry is taken into account in the programs for the federal election on February 23, 2025.
The VDMA is calling for reliable framework conditions for growth and competitiveness in Germany in 2025. Together we can master the challenges of the future. You can find the details in the economic policy positions for 2025.
The VDMA calls for lower tax burdens, including the abolition of the solidarity surcharge and a corporate tax rate of a maximum of 25 percent.
The implementation of reporting obligations for work assignments in Europe is a major challenge for many VDMA member companies.
2025 is the year in which Germany must set the course for growth and competitiveness. It needs more courage to ensure freedom and rapid political reforms.
The Federal Ministry of Finance is adjusting the per diems and overnight allowances abroad in accordance with the Federal Travel Expenses Act as of January 1, 2025.
The Annual Tax Act 2024 is a constructive compromise. Now measures for industry must follow, such as improved declining balance depreciation.
On the occasion of the adopted regulations on digital tax assessments, Dr. Johannes Gernandt, Head of the VDMA's Tax Department, explains:
The draft for the Tax Reform Act has both light and shade. The fact is: Germany needs relief for the economy. Now.
The new research allowance is becoming increasingly popular in the mechanical engineering sector. The Federal Ministry of Finance has now issued an important statement regarding the application deadlines for previous years.
Attention all those interested in Europe! With our new web seminar series "EU Bubble talks - 30 minutes insights from Brussels", we take a look behind the scenes of European politics and take you with us.
In the BMF circular dated 12.12.2023 on the tax treatment of wages under double taxation agreements, the explanations/examples for determining residency have been expanded.
We are pleased to introduce our new event series "Automation in the Tax Department".
The Budget Financing Act 2024 (Federal Law Gazette 2023 I No. 412 of 29.12.2023) extended the application-based electricity tax relief for companies in the manufacturing sector with effect from 1.1.2024.
A complete success: The mechanical engineering sector is the frontrunner in the use of the state research allowance. The funding instrument strengthens Germany's competitiveness as a business location.
Overview of double taxation treaties and income tax exemption for stays abroad (only in German).
In its ruling of 23.11.2023 (case reference: VI R 15/21), the Federal Fiscal Court (BFH) provided important information on lump-sum taxation in accordance with Section 37b EStG in connection with VIP boxes and the scope of their benefits.
On February 13, 2023, new reporting obligations were introduced under the new Excise Duty System Directive for excise goods in free circulation that are delivered or received across EU borders.
At the end of January, the Research Allowance Certification Office updated the form for applying for the research allowance.
The mediation committee called by the Bundesrat will not meet again this year. Negotiations between the federal and state governments had previously failed in informal working groups
The BMF has published the new non-cash benefit values for meals in a BMF letter.
In order to cope with the new world of work, a multilateral framework agreement will allow more flexible -deviating from the conflict of laws- regulations for teleworkers from July 01, 2023.
The BMF published its revised Administrative Principles Transfer Pricing 2023 (VG VP 2023) on June 6, 2023.
In fiscal year 2023/2024 (01/04/2023 - 31/03/2024), India will increase the domestic withholding tax rate on remuneration for technical services and royalties from 10% to 20% plus Surcharge and Health Education Cess.
VDMA is campaigning for less bureaucracy in work assignments in Europe. An overview of the facts and figures shows that there is still a long way to go before the Internal Market runs smoothly.
Brazil will in the future follow the OECD Transfer Pricing Guidelines, thus turning away from the previous special regime.
The steep rise in interest rates in recent months has direct consequences for intergroup transfer prices and will be the focus of future tax audits.
The BMF has published its first discussion draft for the national implementation of the global minimum tax in Germany.
In the future, taxpayers will be required to submit their transfer pricing documentation without a request within 30 days of being notified of the audit order.
Based on the EU Commission`s Telework Guidance of May 13, 2022, Germany and Austria have created an agreement with foresight for the period after the COVID-19 special regulation from July 1, 2023.
CBDT provides relaxation, allows manual filing of Form 10F by non-resident taxpayers not having PAN till March 31, 2023.
Schengen visa may allow short-term deployment of non-EU service technicians in Germany.
In 2022, the new regulation for Transfer of Functions (FVerlV) came into force. The submission deadline of transfer pricing documentation will be dramatically shortened from Jan. 1, 2025.
In June 2022, the EU Administrative Commission had agreed on the adoption of a "No Impact Policy" with a transitional period of the special pandemic-related regulations until December 31, 2022. This has now been extended to June 30, 2023.
After the possibility of paying the tax-free inflation compensation lump sum was included in the law (§ 3 No. 11c EStG), the Federal Ministry of Finance (BMF) has now published an FAQ to clarify individual questions.
"Mobile working abroad" has become a top issue for companies that want to be attractive to qualified specialists and managers who live outside Germany. But what needs to be taken into account?
Countries such as the United Kingdom and the Netherlands have already taken the first steps towards national implementation of Pillar II, and other countries are in the starting blocks.
In the course of commenting on the Annual Tax Act 2022, the Economic Committee of the Bundesrat calls for a reduction of the corporate tax burden to 25 percent and an unlimited declining balance depreciation. This takes up central VDMA positions.
The German government has agreed on a draft annual tax law and introduced it into the parliamentary procedure. It also includes some regulations for wage and employee taxation.
After the federal government has already agreed on various measures to reform and accelerate the external tax audit, the coalition has now surprisingly launched another innovation and lays the first foundation stone of a system audit
For some years now, the tax authorities have been trying to speed up external tax audits. Now the measures are available within the framework of a bill.
For some years now, the tax authorities have been trying to speed up external tax audits. Now the measures are available within the framework of a bill.
List of planned experience exchange events ("ERFA") from the North, VDMA Regional Association North and the Marine Equipment and Systems (MES) working group.
The German Federal Ministry of Finance (BMF) has published the brochure "The most important taxes in international comparison".
The German Federal Ministry of Finance (BMF) plans to shorten the submission deadline.
On 05.07.2022, the BMF published the draft bill of a new function shifting regulation ("FVerlV-E").
The BMF letter contains regulations for the exemption of wages for certain foreign activities in countries with which there is no double taxation agreement.
The unanimity necessary for the adoption of the directive failed due to the veto of Poland, Sweden, Malta and Estonia.
Due to their high export quota the companies of the VDMA Large Industrial Plant Manufacturers' Group are particularly affected by double taxation.
What initially appears easy to implement turns into a legal bureaucratic monster on closer inspection. Here you will find the most important messages from the VDMA series of events on the topic of "Mobile working abroad".
In Berlin - in line with the coalition agreement - there are intensive discussions about an investment premium or super depreciation, which should be limited to goods that particularly serve climate protection and digitization.
These tax aspects have to be considered for a work assignment in the USA.
On January 20, 2022, the OECD published the 2022 version of the OECD Transfer Pricing Guidelines (TPG).
The BFH reaffirms the priority application of the price comparison method.
Global minimum tax rules are designed to be very complex and will increase tax compliance efforts.
With the letter dated 05.11.2021, the BMF recasts the administrative principles, in particular regarding private use.
The BMF refrains from adjusting the foreign per diem and foreign overnight allowances according to the Federal Travel Expenses Act as of January 1, 2022. The regulations made for the year 2021 shall continue to apply for 2022.
A study by the Ifo Institute clearly points out the major benefits for growth and employment of accelerated depreciation and also of a reduction in the corporate tax rate.
Plant construction projects are a complex matter of international taxation of large plants.
Who taxes what?
India is one of the 139 member countries who are already onboard to the two pillar plan for reformation of international tax rules and have expressed their commitment thereto.
Now in effect: 30 % withholding tax on remuneration paid to foreign companies without F-Tax registration, introduction of economic employer concept and reporting obligations to the tax authority.
From Excel sheet to optimized transfer pricing system
From theory to practical implementation.
Tools for the implementation of a transfer pricing project.
The video explains in two minutes how and why technical services trigger double taxation.
The Federal Ministry of Finance has issued an updated letter regarding the tax recognition of entertainment expenses. The main focus is on new document requirements due to the Cash Security Protection Ordinance and principles for digital or digitised documents.
In a ruling on the wage tax treatment of cancellations of company events at short notice, the BFH has clarified that the costs of the external framework are only to be allocated to the actual participants.
In a letter dated 9.6.2021, the BMF amends the sales tax application decree. Due to new ECJ case law, a previous delimitation criterion is no longer applicable.
In a letter dated May 11, 2021, the German Federal Ministry of Finance commented on the distinction between sales tax and insurance tax for guarantee commitments.
On the occasion of the current flood disaster, the Federal Ministry of Finance has issued a letter with equity measures in VAT.
On the occasion of the current flood disaster, the federal states of North Rhine-Westphalia and Rhineland-Palatinate have published disaster decrees with simplification regulations.
If employees are under pressure due to emergency situations, employers may also assist their employees by providing tax-free support benefits under certain circumstances.
As a result of the Act to Modernise Corporation Tax Law (KöMoG), partnerships will in future have the option of being taxed in the same way as a corporation.
For a long time, there was an incongruity regarding the tax treatment of exchange rate effects in connection with loans between related companies.
The German Corporate Income Tax Modernisation Act (KöMoG) changes the tax balance sheet treatment of excess/shortfall transfers by corporate tax groups.
Poland has adjusted its transfer pricing regulations twice in the last 5 years and tax audits can include three different regimes. Taxpayer should carefully align periods with different requirements.
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).
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).
After more than a year of deadlock, the governing parties have agreed on new regulations on share deals in the real estate transfer tax.
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.
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.
The legal framework is complex and must be carefully examined.
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).
In the following, we have compiled and answered the basic questions on these instruments for you.
As of 3/15/2021, the Federal Ministry of Finance has updated the lists for so-called reciprocity.
The BMF has extended the transitional regulation in the letter dated 1.10.2020.
If you still want to claim an input tax rebate for 2020 in the UK, you need to hurry!
A temporary change of place of employment due to the current pandemic may have an impact on the previously established social security law
As the economy becomes increasingly digital, the business models of many companies are changing. Many new digital business models are no longer tied to physical locations.
From a fiscal point of view, too, the pandemic has radically changed many things for the economy and thus also for the VDMA Large Industrial Plant Manufacturers.
The Supreme Court of India on March 02, 2021 settled the long pending issue of taxability of cross border payments for import of software licenses in favor of the assessees. The application of the decision requires that the foreign Taxpayer is protected by a Double Taxation Avoidance Agreement (“DTAA”). The decision is of high relevance.
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.
Scope of digital tax (Equalization Levy) to be narrowed.
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.
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.
The protocol to the free trade agreement contains regulations (Social Security Coordination - SSC) which guarantee the cross-border mobility of employees.
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.
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.
Mobile working in a home office is becoming increasingly important. The trend towards the home office will continue even after the pandemic. Home office activities abroad can have undesirable tax consequences for both employees and employers.
Do you actually know all the services of our association that are important to you? Whether online, in writing or in person: Our range of services is as diverse as our industry - here you will find an overview.
After the new § 6a UStG came into force on 1.1.2020, there was no statement from the tax authorities on how to deal with the stricter requirements in practice.
In a letter dated 1.10.2020, the Federal Ministry of Finance commented on the term "Werklieferung". According to the case law of the V. Senate of the Federal Court of Finance (judgement of 22 August 2013, V R 37/10 ), a delivery of work pursuant to § 3 (4) UStG shall only be deemed to exist if a foreign object is processed or treated.
This practical study asked about the experiences and expectations with foreign permanent establishments.
For work assignments within Europe, the three topics of "reporting requirements", "social law: A1 certificate" and "labour law: posting directive" are increasingly coming into focus.
More and more VDMA members want to find out about the structure and economic situation of their customers or potential partners in China. The VDMA offices in China have taken up this demand and now offer a corresponding service via the local VDMA service company.
On 30.6. the tax authorities published the final BMF letter on the reduction of VAT.
Many workers commute from their place of residence to another country to work. Home office work and border closures, which are currently ordered in many cases, can have tax disadvantages for cross-border commuters.
As already announced in the media, the Federal Ministry of Finance and the Federal Ministry of Economics and Technology (BMWi) published last Friday the plan of measures to support German companies in the event of negative consequences of the Corona Virus.
At the request of the BDI, the BMF has commented on the handling of the receipt obligation (Section 146a (2) AO) in company canteens, which has existed since 01.01.2020. This is a clarification regarding the current legal situation.
Statement on the planned introduction of a "white list" of non-notifiable facts in the context of the national implementation of the so-called DAC-6 Directive 2018/822/EU of 25 May 2018.
The amendment of the VAT system directive (so-called "Quick fixes") has been implemented in German VAT law as of 1.1.2020.
The BMAS has published a recommendation on the Internet on the "Handling of the A1 certificate for short-term and short-term activities in other EU countries".
The Federal Fiscal Court (Bundesfinanzhof, BFH) has ruled in several judgments on the new tax law on travel expenses that has been in force since 2014.
In a light-footed manner, the book "Quantitative Transfer Pricing" presents one of the most important topics in international tax law.
Here you can find information on how to apply for the A1 certificate in Austria.
At the end of February, the Federal Ministry of Finance finally published a first draft bill for a research allowance law.
The tax-free job ticket has been reintroduced since January 1, 2019. This is intended to make the job ticket more attractive again for companies and employees.
On January 22, 2019, the Greens/EFA Group in the European Parliament published a specially commissioned study to show that companies in the EU are effectively far less taxed than the individual tax laws nominally provide for. In many respects, however, this study has serious shortcomings in terms of content and thus leads to incorrect results.
For many years, the VDMA has been committed to tax incentives for research and development, which should be introduced as a supplement to direct subsidies.
In June 2018, the Federal Ministry of Finance (BMF) published a new decree dated June 14, 2018 concerning the granting of a suspension of the execution of interest pursuant to sections 233 and 238 (1) AO for interest periods beginning 2015 onwards. This scope is now extended to interest periods beginning 2012 by the new decree of the BMF dated December 14, 2018.
In 2017, the German Federal Fiscal Court ruled that fiscal unities cannot be recognised for tax purposes, in case variable compensation payments will be done to minority shareholders of controlled companies in addition to fixed compensation payments. Now the legislator is reacting with an amendment of sec. 14 para. 2 Coporate Income Tax Act.
Due to a change in German income tax legislation, interest will be determined for taxes on capital gains resulting from sales of certain assets within the meaning of section sec. 6b para.1 of the German Income Tax Act, provided that no reinvestment takes place in other EU/EEA countries. The new regulation already apply from fiscal year 2018 onwards.
As a result of the Family Relief Act, there will be several changes in German income tax legislation, effective as of January 1, 2019 . The changes relate to the areas of the basic allowance, the income tax rate, the child benefit as well as the child allowances.
Since January 1, 2019 there has been a new regulation for the taxation of electric and hybrid vehicles.
In its ruling of 27 June 2018, 3 K 870/17, the Cologne Tax Court decided that the wage tax treatment of company events must be based on the number of those for whom the costs were calculated.
As early as July 2018, the previous Heubeck mortality tables from 2005 were replaced by an updated version. The Federal Ministry of Finance (BMF) has now published a new decree dated 19 October 2018 concerning the first-time application of the updated mortality tables.
Fact sheets and link collection from external institutions and service companies
The 1% rule applies to the provision of a company car for private use, but not to trucks and tractors, as these are not normally used for private purposes. And the workshop car?
In a letter dated June 15, 2018, the Federal Ministry of Finance responded to a submission by the VDMA on the tax exemption of turnover for maritime shipping under § 8 UStG and answered some questions of doubt.
We provide our members with interesting information on the latest developments and the most important decisions in the field of tax law in our topic-related newsletters.
Together with company representatives, the VDMA has created a signpost which contains practical implementation examples for the implementation of a Tax Compliance Management System.
In a ruling of 4 May 2017, case C -33/16, the European Court of Justice decided that services of loading and unloading of a seagoing vessel may be tax-free not only when calculated at the last stage of trade (see also European Court of Justice ruling of 14 September 2006 - C-181/04, C-182/04, C-183/04), but also at previous stages of trade.
According to § 10 paragraph 2 sentence 1 number 1 EStG, a deduction of special expenses for pension expenses (e.g. contributions to statutory or professional pension insurance, health and nursing care insurance contributions) is only possible if these expenses are not directly economically connected to tax-free income.
The Commission wants to change EU VAT radically
On 1 January 2018, important changes to the Swiss VAT law will come into force. In future, German entrepreneurs will have to register in Switzerland for standard cases.
Anyone active in the internal market has no choice but to apply for input tax refunds in other Member States. Disappointments are the order of the day.
In recent years, the VDMA had been working intensively to ensure that pension accruals in the tax balance sheet were valued at an interest rate more in line with reality. But so far without success. In the last legislative period, the legislator was only able to bring itself to not let the interest rate in the commercial balance sheet fall too quickly; however, it refused to make the more expensive correction in the tax balance sheet.
Member companies can participate in the committees listed below.
BFH: Trade fair participation costs paid to trade fair organisers by exhibitors and implementation companies do not have to be added to the trade taxable profit on a pro rata basis pursuant to § 8 GewStG.
The Federal Ministry of Finance (BMF) has commented on the extent to which the ruling principles of the decision of the Federal Court of Finance (BFH) on so-called mayor or authority leasing (VI R 75/13) are also applicable outside of authority leasing.