Detailed question regarding regulation according to 6b - Income Tax Act
April 11, 2022 | 100,00 EUR | answered by Steuerberater Knut Christiansen
Dear Sir or Madam,
Background:
For the transfer of hidden reserves in the sale of certain assets according to § 6b EStG, here the sale of a property, I have made a permissible provision in the amount of the gain on sale, which is also recognized by the tax office.
I will now acquire a property in Italy (EU) as a "reinvestment" and activate it in my domestic fixed assets, thereby releasing the provision. I will record the rental income as income in my domestic company for tax purposes.
I will NOT assign this property to a business asset in Italy/EU, nor will I establish a company or conduct business activities there. Therefore, I will NOT apply the provision of § 6b Abs. 2a, sentence 1.
Question:
Is the reinvestment in my domestic fixed assets "unproblematic" or am I "forced" to apply the special provision according to § 6b Abs. 2a, sentence 1 (even though I do not meet the requirements)?
Best regards,
Anton Maier, PO Box 100925, 80083 Munich
Good morning,
I am happy to provide you with the following assessment regarding your question.
In the past, there have been several judgments that criticized violations of the freedom of establishment because transfers to EU properties were not possible. The legislator has reacted to this, but has only created an option for installment payments. This should be sufficient under union law (see also: https://sis-tagesaktuell.de/archiv/einkommensteuer/rechtsprechung/8469-bfh-uebertragung-einer-6b-ruecklage-auf-eine-eu-betriebsstaette).
In my opinion, the tax office may see a problem in your case. According to double taxation agreements (DTA), the profits (current and disposal) from the property are regularly attributed to the state where the property is located. Therefore, in my view, a simple allocation to domestic business assets may not be possible, as the tax office will consider the property abroad as a kind of permanent establishment, where transfer is excluded by law.
Please note that this forum cannot replace personal advice. This is only an initial tax assessment.
Best regards
Knut Christiansen
Tax advisor
