Law On Tax Measures For Foreign Investment Of The German Economy

Original Language Title: Gesetz über steuerliche Maßnahmen bei Auslandsinvestitionen der deutschen Wirtschaft

Read the untranslated law here: http://www.gesetze-im-internet.de/auslinvg/BJNR012140969.html

Law on tax measures for foreign investment of the German economy AuslInvG Ausfertigung date: 18.08.1969 full quotation: "law on tax measures for foreign investment of the German economy from August 18, 1969 (BGBl. I S. 1211, 1214), most recently by article 16 of the law of December 19, 2008 (BGBl. I S. 2794) has been changed" stand: last amended by article 16 G v. 19.12.2008 I 2794 for details on the stand number you see in the menu see remarks footnote (+++ text detection from validity) : 30.12.1981 +++) (+++ to the application see section 8 +++) the G as article 2 G 707-6-1-1 v. 18.8.1969 I 1211 (StÄndG 1969) by the German Bundestag, with the consent of the Federal Council decided. It is accordance with art.13 set 2 of this G on the 22.8.1969 entered into force.

§ 1 tax-free reserves to transfer certain assets in companies, businesses or permanent establishments abroad (1) taxpayers who determine the profit according to article 4, paragraph 1, or article 5 of the income tax Act and related to investment in part of the meaning of paragraph 2 to the fixed assets of a domestic operation depreciable assets in the company, transfer operation or permanent establishment in a foreign country, can transfer fiscal year up to the amount of the profit resulting from the transfer of a reserve reducing the profit tax form. The reserve is to resolve from the fifth on their education following marketing year on year with at least one-fifth profit increasing.
(2) investment abroad within the meaning of paragraph 1 are 1 the acquisition of stakes in corporations with headquarters and management in a foreign State, 2. deposits in partnerships in a foreign State, and 3. the supply of business assets in a company or a permanent establishment of the taxpayer in a foreign State.
(3) the formation of the reserve referred to in paragraph 1 is excluded, if the taxpayer for investment abroad takes the tax advantage of section 3 of the developing countries tax claim.
(4) participations within the meaning of paragraph 2 No. 1 sold or transferred into the private assets, so is the qualified reserve in the year of the sale or transfer to the private assets in the ratio of the share of sold or convicted in the private participation to the total contribution within the meaning of paragraph 2 No. 1 ahead of time increasing profits for the participation to resolve. The same applies if investment abroad within the meaning of paragraph 2 No. 2 and 3 the Fed assets sold or transferred inland or in the private, without that until the end of the marketing year following on the sale or transfer to an appropriate extent replacement asset transferred to the partnership, operating, or the permanent establishment abroad. A conversion of a partnership, a company or a permanent establishment abroad in a corporation due to the conditions in the foreign State if the early profit-enhancing resolution of the reserve in the amount of the amount or partial amount corresponding to the relationship between the participation of the taxpayer of this Corporation and its share of the partnership, operating, or the premises before the conversion. After the conversion, sentences 1 and 2 shall apply mutatis mutandis. The company, the operation or the permanent establishment abroad no longer meets the requirements of section 5, is the tax-free reserve in full profit increasing to resolve.
(5) a prerequisite for the application of paragraphs 1 to 4 is that the formation and dissolution of the reserve in the accounts can be traced.
Footnote (+++ article 1, paragraph 3, sets 1 and 2: to the application see section 8 subsection 3 F. from 1981-12-22 +++) § 2, income from commercial activity from the income tax foreign losses in tax treaties (1) are after an agreement to avoid double taxation in a fully taxable from a permanent establishment located in a foreign State or tax free, a loss is at the request of the taxpayer , which according to the provisions of the income tax act when these earnings results and compensated according to the provisions of the income tax act by the taxpayer or unplug could, if the revenue from the personal income tax or corporate income tax to liberate, to deduct in the determination of the total amount of income in so far, as he by this agreement to liberating positive income from commercial activity from others in that foreign State exceeds located premises. As far as the loss it is not balanced, the loss deduction is allowed when the conditions of 10 of section d of the income tax act. The amount deducted pursuant to sentence 1 is in one of the following disposition periods when the earnings to liberating after this agreement a positive amount resulting from commercial activity from permanent establishments located in that foreign State as a whole, to be added again in the relevant assessment period in determining the total amount of income. Sentence 3 shall not apply if the taxpayer can show that according to the legislation of the foreign State for him a deduction generally not to be claimed losses in other years as the loss year.
(2) If a permanent establishment situated in a foreign State is converted into a corporation, so is one referred to in paragraph 1 sentences 1 and 2 deducted loss, insofar as he set 3 again is been added pursuant to paragraph 1 or not yet be added is set 3 in the assessment period of the conversion into equivalent application of paragraph 1 the total amount of income to be added. Sentence 1 shall not apply if 1 in the converted facility the conditions of in paragraph 1 sentence 4 were submitted, or 2. the taxable person proves that the Corporation can claim a deduction of losses of the permanent establishment according to the applicable regulations.
Footnote (+++ § 2 para 1 sentence 3 and 4, paragraph 2: the application see section 5 sentence 2 (F from 1999-03-24) +++) § 3 tax-free reserve for losses of foreign subsidiaries (1) unlimited taxpayers who determine the profit according to article 4, paragraph 1, or article 5 of the income tax Act, can for losses of a corporation with headquarters and management in a foreign State, the nominal share capital the taxpayer at least to 50 per cent , (foreign subsidiary) is directly involved in corporations with headquarters and management in developing countries in the sense of § 6 of the developing countries tax to 25 per cent, at least, a reserve that reducing the income tax form. The formation of the reserve is for the marketing year in which the taxable person acquires shares of the foreign company to such an extent that leads first to a participation of the taxpayer to the extent referred to in sentence 1, or - if the taxpayer in the foreign capital company already to the extent referred to in sentence 1 was involved - in which he acquires more shares in this Corporation , and is allowed in the four following years. the newly purchased shares must be at least 5 per cent of the nominal capital of the foreign company. The reserve may be made for the fiscal year of the taxpayer in which the loss of the foreign subsidiary was created, up to the amount of the part of the loss, which corresponds to the ratio of the newly acquired shares to the nominal capital of the company; It is to reduce the amount in the amount of the taxpayer in the year of their education on the newly acquired shares to the foreign subsidiary makes a part of goodwill. The reserve may not exceed the amount, with the newly acquired shares in the tax balance sheet are.
(2) a prerequisite for the formation of the reserve is that 1 the new acquisition within the meaning of paragraph 1 sentence 2 after December 31, 1968 was held, 2. the loss of the foreign subsidiary is determined according to regulations, complying with the General German profit determination; tax benefits are there to ignore, 3. the conditions of number; detected 2 and § 5 by relevant documents, in particular balance sheets and income statements and any annual reports of the foreign subsidiary, on request, these documents with the State of the Executive Board or of the seat are prescribed or usual examination certificate of an officially recognized auditing authority or equivalent body to submit, 4. the taxpayer and the foreign affiliate agree to submit documents of the kind referred to in paragraph 3 also for the marketing years following the loss year as long a reserve within the meaning of paragraph 1 is shown; the documents must undoubtedly result in the height of the operating results achieved in these years the foreign subsidiary, and 5 the foreign subsidiary explains that she does not agree to the German tax authorities with the provision of information by the tax authorities of the State in which it has its registered office and its management,.
(3) that is reserve to resolve an increase in profit, 1.
If the foreign subsidiary in a year following the year of loss to make a profit in the amount of the part of the profit, which sentence 2 to the nominal capital of the foreign subsidiary is a ratio of the newly-acquired shares within the meaning of paragraph 1, where he the loss parts, which in the formation of the reserve, after paragraph 1 sentence 3 second half of sentence and sentence 4 remain unconsidered , or the amount of resolution within the meaning of point 2 exceeds 2. when a part of goodwill is made in a following on their education marketing year on the newly acquired shares within the meaning of paragraph 1 sentence 2 to the foreign subsidiary, in the amount of the partial value depreciation, 3. If the taxpayer sells shares to the foreign subsidiary or the assets transferred are equal to the part of the reserve , of which sold the share or convicted shares in the newly acquired shares within the meaning of paragraph 1 sentence 2 corresponds to in the private, 4. If the proof obligations referred to in paragraph 2 are not met no. 4 in full, no later than at the end of the fifth on their education following marketing year.
(4) article 1, paragraph 5 shall apply mutatis mutandis.
Footnote (+++ section 3 para 2 No. 2: to apply see § 8 section 3 F. from 1981-12-22 +++) section 4 - section 5 common conditions is condition for the application of paragraphs 1 to 3, that the company, the operation or the permanent establishment abroad exclusively or almost exclusively has the production or delivery of goods except arms, the extraction of natural resources and the provision of commercial services to the subject , if this not in the construction or operation of facilities that serve the tourism, or in the rental and leasing of assets including the assignment of rights, plans, patterns, processes, experiences and knowledge. Insofar as the provision of commercial services in the operation of ships or aircraft in international traffic, is another precondition, confirmed that the Federal Ministry of transport, building and urban development or the body appointed by the transport policy eligibility.
Footnote (+++ § 5: to the application see § 8 ABS. 3 F. 1981-12-22 +++) § 6 trade tax the provisions of paragraphs 1, 3 and 4 apply also for the commercial yield estimation.
Footnote § 6: Formerly § 5 pursuant Article 33 No. 5 G v. 22.12.1981 I 1523 mWv 30.12.1981 italic: see footnote to article 4 § 7 authorization of the Federal Minister of finance is authorised to disclose the wording of this law in amended with new date, change the paragraph that and eliminate inconsistencies of the wording.

§ Scope (1) that is preceding version of this Act subject to paragraphs 2 and 3 for the first time to the assessment period 1982 to apply 8.
(2) paragraph 4 as amended by article 2 of the Act of August 18, 1969 (Federal Law Gazette I p. 1214) is to apply to shares in corporations that are acquired before January 1, 1982.
(3) § 5 in conjunction with §§ 1 and 3 is to apply for the first time for the financial year beginning after December 31, 1981; for fiscal years beginning before January 1, 1982, section 1, paragraph 3, sentence 1 and 2 and § 3 para 2 are no. 2 in the version of article 2 of the Act of August 18, 1969 (Federal Law Gazette I p. 1214) to apply.
(4) earnings can be made last time according to §§ 1 and 3 for the marketing year that ends before January 1, 1990.
(5) § 2 is last on losses of for fiscal year 1989 to apply. Section 2, subsection 1, sentence 3, 4, and para 2 is further applied to investment periods from 2009.

Section 9 application in the Land Berlin this law shall apply in accordance with § 12 para 1 of the third of transfer Act of January 4, 1952 (Bundesgesetzbl. I p. 1) also in the Federal State of Berlin.

Article 10 entry into force this law enters into force on the day after its promulgation.