Law on tax measures for the promotion of private capital investments in developing countries (Development countriestax law-DeweLStG)

Unofficial table of contents

Deforestation

Date of completion: 23.12.1963

Full quote:

" Development country-specific law in the version of the notice of 21 May 1979 (BGBl. 564), as last amended by Article 81 of the Regulation of 25 November 2003 (BGBl I). I p. 2304).

Status:	Reconceived by Bek. v. 21.5.1979 I 564,
	Last amended by Art. 81 V v. 25.11.2003 I 2304

For more details, please refer to the menu under Notes

Footnote

(+ + + Text proof applicable: 29.8.1980 + + +) 
(+ + + For application cf.  § 11 + + +) 

  

First section
Taxes on income

Unofficial table of contents

§ 1 Tax-free reserve for capital investments in developing countries

(1) taxable persons who carry out capital investments in developing countries by means of a domestic holding whose profit is determined in accordance with § 4 (1) or (5) of the Income Tax Law can be charged to the profit of the domestic establishment to form a reserve. The reserve may be used in the case of investments

1.	in developing countries in Group 1	100 of the hundred
	and
2.	in developing countries in Group 2	40 of the hundred

the acquisition or production costs of the capital investments. The reserve shall be resolved at the latest by the sixth marketing year following the sixth year of education.

1.

in the case of investments in developing countries in the group, with at least one twelfth per year,

2.

in the case of investments in developing countries in Group 2,

a)

For which the Federal Ministry for Economic Cooperation and Development, in agreement with the Federal Ministry of Economics and Labour, has confirmed, on the basis of evidence of the taxpayer, that it is in a particularly employment-effective manner companies have been made and are therefore likely to counteract unemployment in developing countries, with at least one twelfth each year; the conditions at the end of the period of employment are the main ones for assessing the employment impact of the the fourth marketing year following the formation of the reserve;

b)

in the other cases each year, at least one-sixth.

The requirement for the application of sentences 1 to 3 is that the formation and dissolution of the reserve in the accounting system can be pursued. (2) In the case of investments in developing countries in Group 2, in which the Federal Ministry of Economics and Technology Work in agreement with the Federal Ministry for Economic Cooperation and Development, taking into account the needs of the developing country, the special eligibility for the raw material or energy cooperation , paragraph 1 shall apply with the proviso that the reserve shall be applied up to the level of 60 of the hundred of the cost of the capital investment may be constituted and shall be dissoled at the latest by the sixth marketing year following its formation on a yearly basis with at least one twelfth. (3) Capital investments in Developing countries within the meaning of paragraphs 1 and 2

1.

participations in capital companies in developing countries which have been acquired on the occasion of the establishment or a capital increase;

2.

Loans granted to capital companies in developing countries in connection with the establishment or substantial expansion of the undertaking, if under the contractual arrangements,

a)

the right to repayment of the loans before the expiry of three years after the loan, against the granting of company rights, to be incorporated in the capital company, or

b)

the loans are not to be repaid in whole or in part before the expiry of six years since the devotion, and

aa)

the creditor, at the time of the granting of the loan, directly or indirectly with at least 15 of the hundred, in the case of loans to capital companies which have the sole or almost exclusive exploitation of mineral resources, with at least 5 of the hundred, participating in the capital of the investment-receiving capital company; or

bb)

in the case of loans instead of an interest, only participation in profit is granted; or

cc)

by the offeree capital company at least until the end of six years since the devotion of the loan to a non-insignificant part of economic goods using industrial property rights, copyrights, plans, designs, the method or the commercial experience and knowledge of the loan provider, or are sold under a trade mark of the client,

3.

Deposits in human resources companies in developing countries for the purpose of setting up or a significant expansion of the company; and

4.

the operating assets which have been supplied to an establishment or establishment of the taxable person in developing countries for the purpose of setting up or a substantial extension;

if the company, the establishment or the establishment in developing countries are exclusively or almost exclusively
the manufacture or supply of goods other than weapons, or
the extraction of mineral resources, or
the effects of commercial services, in so far as they do not result in the establishment or operation of facilities used for tourism or in the rental and leasing of economic goods, including the release of the use of rights, plans, patterns, procedures, experience and knowledge, or
the operation of a agriculture and forestry sector
to the subject. In so far as the effects of commercial services on the operation of merchant ships or aircraft in international transport exist, further condition is that the Federal Ministry for Economic Cooperation and Development shall, in agreement, with the Federal Ministry of Transport, Building and Housing, or the authority which they have determined, confirms the development policy and transport policy eligibility of the capital investment. In the case of loans, the reserve shall be granted on condition that:

1.

in the case of sentence 1 (2) (a), the claim is brought against the granting of company rights in due time; and

2.

in the case of sentence 1 (2) (b), the loans shall not be repaid prematurely.

Capital investments in developing countries within the meaning of the first sentence of sentence 1 (1) to (3) shall be encouraged even if they are made by the taxable person not directly but in such a way as to ensure that:

1.

the taxable person acquires shares in a capital company with its registered office and management in a developing country if the taxable person's participation in that capital company comprises more than a quarter of the capital and the amount of the capital company's capital is more than one-fourth of the capital. Capital Corporation

a)

is exclusively involved in other capital companies or in partnerships in developing countries, or

b)

carry out its own activities within the meaning of the last sentence of sentence 1 and, in connection with that activity, hold participations in other capital companies or partnerships in developing countries; and

2.

the funds used for the acquisition of the shareholding are used by the capital company within two years of the acquisition of investment in the capital investments within the meaning of the first sentence of sentence 1 to 3.

(4) The formation of the reserve shall be allowed only during the marketing year in which the funds which are the object of the capital investment have been supplied to the company, to the establishment or to the establishment in developing countries. The date of delivery within the meaning of this Act shall be the date on which the company, establishment or establishment within the meaning of the first sentence of paragraph 3 may, for the first time, dispose of the funds which are the subject of the investment. (5) Measurement of the reserve shall only be taken into account in the capital investments, in so far as the funds supplied are in abuseable assets of the fixed assets or in the assets of an industrial holding company or the German soil or the German Right of inheritance in accordance with the law or in the assets of the stock (Roh-, (c) the use of auxiliary and operating materials, as well as semi-finished and finished products, or used until the end of the second marketing year following the introduction of the goods for the purchase or manufacture of such goods. However, the assets of the assets are to be taken into account only in so far as the company, the holding or the establishment in developing countries at the end of the marketing year, which is the marketing year of the supply of the funds (6) In the case of investments in credit institutions, and in the case of capital investments in credit institutions, it follows that the stock of assets in the stock assets at the end of the marketing year preceding the marketing year of the supply of the funds is present. Insurance companies in developing countries, where the Federal Ministry of In agreement with the Federal Ministry for Economic Cooperation and Development, the economy and labour have confirmed the special eligibility for development policy, and the part of the supply can also be used in the assessment of the reserve. shall be taken into account by the end of the second marketing year following the introduction into the developing country of loans with a maturity of at least six years to undertakings in developing countries Financing of in-company investments or the acquisition of holdings Undertakings in developing countries which satisfy the conditions set out in the last sentence of the first sentence of paragraph 3 shall be used or deposited with the State Bank of the developing country in accordance with legal provisions of the developing country. (7) The provisions of paragraphs 1 to 6 shall apply in accordance with a similar legal relationship with undertakings in developing countries whose legal system does not allow capital investments within the meaning of the first sentence of paragraph 3 (1) to (4).

Footnote

(+ + + § 1 (7) and 8: For use, see Section 11 (4) sentence 1 F. from 1981-12-22 + + +) Unofficial table of contents

§ 2 Tax-free reserve for shareholdings in capital companies in developing countries acquired by the development company

(1) taxable persons who, by means of a domestic holding, whose profit is determined in accordance with § 4 (1) or § 5 of the Income Tax Law, by the German Association for Economic Cooperation (Development Company) with Limited liability of limited liability participations in capital companies in developing countries in respect of which the conditions of § 1 (3) sentence 1 last half-sentence have been fulfilled may be charged in the marketing year of the acquisition at the expense of the profit of the Domestic operations form a reserve. Section 1 (1) sentences 2 and 4 shall apply accordingly. The reserve shall be dissoled at the latest by the sixth marketing year following the sixth year of education, with at least one-sixth of the increase in the number of winners. (2) Unofficial table of contents

Section 3 Special provisions for capital investments by intangible contributions

(1) Capital investments within the meaning of Section 1 (3), which have been acquired through contributions in kind or consist in such investments, can also, if they were to be applied with a higher value in accordance with § 6 of the Income Tax Law, with the value in the balance sheet by means of which, at the time of their expulsion, the goods in question would have been made up of the operating assets of the domestic holding in accordance with the rules on the determination of the tax profit (carrying amount). The same applies to participations in capital companies within the meaning of § 1 (3) sentence 4 No. 1, which have been acquired through contributions in kind, on condition that the condition of § 1 para. 3 sentence 4 no. 2 is fulfilled. The difference between the carrying amount and the partial value of the capital investments referred to in Article 1 (3) (1) (3) and (4) in developing countries with which there is an agreement to avoid double taxation shall be subject to the conditions laid down in Article 1 (3) (3) and (4) of the Treaty. shall, at the time of their leaving, remain out of the operating assets of the domestic holding in the determination of the profit. The discounted rate of the sentence 3 shall be granted on condition that the goods supplied shall be in the developing country for at least three years after their supply in the civil society, the establishment or the establishment, in the case of one by the (2) In the case of the application of paragraph 1, the reserve shall be determined by reference to the provisions of the following: The carrying amount of the goods in question. (3) In the sense of the Paragraph 1 shall lie before, insofar as the company, the holding or the establishment have been supplied with the assets of the fixed assets which can be used for the purposes of Section 1 (3) Sentence 1. (4) The provisions of paragraphs 1 to 3 shall apply in the cases referred to in Article 1 (7). ,

Footnote

(+ + + § 3 (4): For application, see Section 11 (4) sentence 1 F. from 1981-12-22 + + +) Unofficial table of contents

Section 4 Special provisions for certain transformations or divestitures

(1) In the case of capital investments within the meaning of section 1 (3), first sentence, no. 3 and 4, a conversion of the personal company, the establishment or the establishment in the developing country as a result of the conditions in the developing country shall be included in a The taxable person may, in the course of the marketing year, be converted from the cost of the conversion of the fixed assets of the fixed assets of the fixed assets to the taxable person in the marketing year. the marketing year has been purchased or produced, an amount up to the level of this Pull off the thread. In so far as the taxable person has not made the deduction in accordance with the first sentence, he may, in the marketing year of the conversion, form a reserve which reduces the tax profit. In this case, the provisions of Section 6b (3) to (5), with the exception of paragraph 4 (2) of the Income Tax Law, shall be applied in accordance with the proviso that the reserve shall only cover the cost of the purchase or production of (2) Paragraph 1 shall apply mutagenly, to the extent that, in the case of investments within the meaning of Article 1 (3), first sentence, no. 1, 3 and 4, and § 2

1.

as a result of the sale of an establishment or establishment or of shares in a capital company, a civil society, a holding or an establishment in the developing country as a result of the conditions in the developing country or

2.

as a result of the introduction of an establishment, a holding company or shares in a capital company or a partnership in a capital company within the meaning of Article 1 (3) (4) (1)

a taxable profit in the country has arisen. (3) If the taxable person has made a deduction in accordance with the provisions of paragraph 1 or paragraph 2, or has formed a reserve, the provisions of section 34 (1) sentence 1 and 2 of the Income Tax Act shall apply. the profit resulting from the conversion, sale or transfer shall not be applied.

Footnote

(+ + + § 4 (2) sentence 1 no. 2: For application see Section 11 para. 2 F. from 1981-12-22 + + +)
(+ + + § 4 (2) sentence 2: For application, see Section 11 (4) sentence 1 F. from 1981-12-22 + + +) Unofficial table of contents

§ 5 abolition of tax breaks

(1) If capital investments within the meaning of Section 1 (3) or participations within the meaning of § 2 of the Income Tax Act are set at the lower partial value in accordance with § 6 of the Income Tax Act, a reserve formed in accordance with § 1 or in accordance with § 2 shall be the economic year of the approach of the lower partial value of the share corresponding to the difference between the value at which the capital investment has been applied so far and the lower part value, to be resolved prematurely in a profit-increasing manner. Sentence 1 shall not apply to the extent that, in the case of loans within the meaning of Article 1 (3), first sentence, point 2 (b), the lower part of the loan has been made exclusively with regard to the uncharting of the loans. By way of derogation from Article 1 (1), third sentence, a reserve formed for loans within the meaning of Article 1 (3) (1) (2) (b) shall be disburdened from the sixth financial year following its formation to an annual amount of the amount or part of the amount or part of the amount, which corresponds to the share of the repayment in the relevant marketing year at the nominal amount of the loan given; however, the reserve is at least the following marketing year, as referred to in Article 1 (1), third sentence, of the sixth marketing year following its formation. (2) Become a shareholding in capital companies in the In the case of the sale or transfer to the private property of developing countries within the meaning of Article 1 (3) 1 (1) or (2) (a) or (2) (2) (a) or (2), the reserve shall be in the ratio of the To dissolve the share of the capital investment, which has been sold or transferred into the private assets, to the entire capital investment in a prematurely increasing manner. The same shall apply if:

1.

shares in capital companies within the meaning of section 1 (3) sentence 4 no. 1 or by such corporations are sold or transferred to the private capital or transferred to other companies or corporations, or

2.

in the case of investments within the meaning of section 1 (3) of the operating assets of the company, the holding or the establishment belonging to the company

a)

the assets or assets or holdings referred to in Article 1 (6), which have been taken into account in the assessment of the reserve, are sold or transferred to the private property or to a country not to be covered by the of developing countries, or

b)

loans as defined in Article 1 (6) are repaid or resigned or transferred to private assets or to an establishment or establishment in a country which is not part of the developing countries; or

c)

the amounts deposited or lodged with the State Bank of the developing country pursuant to Section 1 (6) shall be repaid,

without the aid of the company, the holding or the holding of the holding, in the case of the letter, at the end of the marketing year following the sale or for the subsequent marketing year, substitute economic goods or manufactured goods, in the case of the sale or for the following marketing year, If the letter bbis towards the end of the marketing year following the repayment, assignment or transfer of the loans, new loans within the meaning of Section 1 (6) shall be granted.

Where assets or assets or holdings referred to in Article 1 (6), which have been taken into account in the assessment of the reserve, are to be made from a developing country of Group 1 into a developing country in Group 2. , the provisions of the second sentence of paragraph 2 shall apply, provided that the part of the reserve resulting from the transferred assets to six tenths must be resolved in a prematurely increasing manner in the event of compliance with the conditions laid down in Section 1 (2) to four tenths of a prematurely increasing amount. In the case of a conversion into a capital company of a partnership, establishment or establishment in developing countries as a result of the conditions in the developing country, the premature increase in profits of the Reserves equal to the amount or part of the amount corresponding to the ratio between the taxable person's participation in the capital company and its share in the partnership, the holding or the establishment prior to the conversion. A provision within the meaning of Section 4 (2) sentence 1 no. 2 does not lead to a premature increase in the profits of the reserve. In the cases provided for in the fourth sentence, the reserve shall be resolved prematurely in the appropriate application of the first sentence if, in the case of the capital company, one of the facts referred to in the second sentence of 2 (2) (a) to (c) is carried out without the need for: the conditions set out in the second sentence of sentence 2 of the last half-sentence shall be met by the capital company. The same applies when an establishment or a holding company is introduced or shares in a partnership in a capital company within the meaning of section 1 (3) sentence 4 (1) (b) (b) (3). the establishment in developing countries no longer requires the condition of the last sentence of § 1 (3) sentence 1 or the seat or management of a capital company within the meaning of Article 1 (3) sentence 4 no. 1 is transferred to a country which is not to the In the case of developing countries, the full amount of the reserve formed in accordance with § 1 or in accordance with § 2 shall be (4) The provisions of paragraphs 1 to 3 shall apply in the cases referred to in Article 1 (7).

Footnote

(+ + + § 5 (2) sentence 2 No. 1, sentence 5 and Sentence 7: For use, see Section 11 para. 2 F. from 1981-12-22 + + +)
(+ + + § 5 (4): For application, see Section 11 (3) sentence 1 F. from 1981-12-22 + + +) Unofficial table of contents

§ 6 Developing countries

(1) Developing countries within the meaning of this Act are the following countries and territories:
Group 1
Ethiopia, Afghanistan, Bangladesh, Benin, Bhutan, Botswana, Burundi, Gambia, Guinea, Haiti, Yemen (Arab Republic), Democratic People's Republic of Yemen, Cape Verde, Comoros, Laotian Democratic People's Republic, Lesotho, Malawi, Maldives, Mali, Nepal, Niger, Upper Volta, Rwanda, Samoa, Somalia, Sudan, Tanzania, Chad, Uganda, Central African empire.
Group 2
Egypt, Equatorial Guinea, Algeria, Angola, Antigua, Argentina, Bahamas, Bahrain, Barbados, Burma, Bolivia, Brazil, Brunei, Chile, People's Republic of China, Costa Rica, Dominica, Dominican Republic, Djibouti, Ecuador, Ivory Coast, Fiji, Gabon, Ghana, Grenada, Greece, Guatemala, Guinea-Bissau, Guyana, Honduras, India, Indonesia, Iraq, Iran, Iceland, Israel, Jamaica, Jordan, Yugoslavia, United Republic of Cameroon, Qatar, Kenya, Colombia, People's Republic of the Congo, Republic of Korea, Kuwait, Lebanon, Liberia, Libyan Arab Jamahiriya, Madagascar, Malaysia, Malta, Morocco, Mauritania, Mauritius, Mexico, Mozambique, Nauru, Nicaragua, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Portugal (excluding Non-European Territories), Romania, Solomon Islands, El Salvador, Zambia, Sao Tome and Principe, Saudi Arabia, Senegal, Seychelles, Sierra Leone, Singapore, Spain (excluding non-European territories), Sri Lanka, St. Christoph-Nevis-Anguilla, St. Lucia, St. Vincent, Suriname, Swaziland, Syria, Taiwan, Thailand, Togo, Tonga, Trinidad and Tobago, Turkey, Tunisia, Tuvalu, Uruguay, Venezuela, United Arab Emirates, Socialist Republic of Vietnam, Zaire, Cyprus. (2) Developing countries of Group 2 within the meaning of this Act are also non-European countries which have become independent after 31 December 1978.

Footnote

(+ + + § 6 para. 2: For the application, see § 11 para. 3 F. from 1981-12-22 + + +)

Second section
Industrial tax and wealth tax

Unofficial table of contents

§ 7

(1) The provisions of § § 1 to 6 shall also apply to the determination of the business contract in accordance with § 7 of the trade tax law. (2) If a reserve has been formed in accordance with § 1 or § 2, it shall be used in the determination of the unit value of the commercial tax. To deduct operations at the same level as those shown in the tax balance sheet for the last balance sheet date prior to the valuation date for determining the unit value of the commercial establishment. (3) In the framework of agricultural and forestry operations, paragraph 2 in accordance with the determination of the total assets of the holder of this agricultural and forestry holding.

Third Section
Final provisions

Unofficial table of contents

§ 8 Erauthorization

The Federal Ministry of Finance is authorized to publish the text of this Act in the current version with a new date, under the new heading and in new paragraph sequence, and in doing so, to eliminate the inconsistencies of the text. Unofficial table of contents

§ 9 Statistics

(1) The Federal Statistical Office (Statistisches Bundesamt) provides federal statistics on the use of the tax-free reserves in accordance with § § 1 and 7. (2) For the implementation of these federal statistics, the taxable persons who are entitled to the tax-free reserves shall be entitled to , after the end of the respective marketing year, the Federal Statistical Office shall, at the request of the Federal Statistical Office, provide information in accordance with officially prescribed form.

1.

the nature and amount and the purpose of the capital investment;

2.

Asset and investment funds,

3.

Number of permanent jobs and apprenticeships created by the capital investment in the investment margin,

4.

The amount of the participation of other companies in the company in which the capital investment has taken place.

(3) Each year, the financial authorities shall inform the Federal Statistical Office of the addresses of the taxable persons who have used tax-free reserves in accordance with § § 1 and 7. (4) Federal statistics shall be carried out for the marketing year, which shall: shall end after 31 December 1978. Unofficial table of contents

§ 10 Berlin clause

This law shall also apply in the Land of Berlin in accordance with the provisions of Section 12 (1) of the Third Transfer Act. Unofficial table of contents

Section 11 Scope

(1) Subject to paragraphs 2 to 4, the above version of this Act shall apply to investments made after 31 December 1978 and 1 January 1982, and to investments made after 31 December 1981, (2) The provisions of § 4 (2) sentence 1 no. 2 and § 5 (2) sentence 2 no. 1, sentence 5 and sentence 7 are also on capital investments , which have been carried out before 1 January 1979. (3) On investments in developing countries in the § 6 (2) The provisions of this Act are to be applied only in so far as the capital investments are made after the independence of these countries. (4) The provisions of § 1 (7) and (8), § 2 (2), § 3 (4), § 4 (2) sentence 2 and Section 5 (4) in the version of the Notice of 21 May 1979 (BGBl. 564) shall be applied last for the marketing year preceding the marketing year for which Section 15a of the Income Tax Act is to be applied for the first time. The provision of section 7 (2) sentence 2 is to be applied last time to the valuation date which precedes the marketing year for which § 15a of the Income Tax Act is to be applied for the first time.