Germany plans to extend taxation of non-resident capital gains resulting from the sale of shares in real estate-rich corporations

September 2018

Until recently, the disposal of shares in foreign corporations with domestic real estate assets by shareholders with limited tax liability could only be taxed if the corporation had its company seat or place of management in Germany and if the shareholder held at least 1 % of the company's share capital. A foreign corporation usually does not fulfill these company seat or place of management requirements, so that taxation was not possible.

The law “to prevent VAT losses relating to trade of goods in the internet and concerning the amendment of other tax regulations” (government draft bill published early August 2018) is supposed to close this tax gap.