The Relation of Article 9 Paragraph 1 German Double Taxation Treaties to Domestic Tax Law and the Consequences for Current Value Depreciation under Section 1 Paragraph 1: Foreign Tax Act: A Short Remark on the Decision of the Federal Tax Court of 17 December 2014, I R 23/13

• Autores: Johannes Becker
• Localización: Intertax, ISSN 0165-2826, Vol. 43, Nº. 10, 2015, págs. 589-594
• Idioma: inglés
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• Resumen

  • In its decision dated 17 December 2014, I R 23/13, the Federal Tax Court (BFH) defined its opinion on the barrier effect of Article 9 of the double taxation treaty with the USA in cases involving the arm’s-length principle more precisely. The author show the consequences of that decision for the German treaty policy and points out that there can be no doubt that Germany is following a restrictive approach applying Article 9 paragraph 1 OECD Model Convention (OECD-MC). Hence domestic tax law can solely be applied if it is not contrary to the arm’s-length principle. Furthermore, the author shows that the BFH had accepted the group support as being part of the arm’s-length conditions for unsecured loans. In consequence it is convincing that the BFH rejected the view of the tax administration, which had not allowed a current value depreciation due to domestic tax law, i.e.,section 1 Foreign Tax Act.