Germany: Shareholder not entitled to challenge assessment against corporation (federal tax court decision)

A federal tax court decision concerning a challenge assessment against corporation

A federal tax court decision concerning a challenge assessment against corporation

The German Federal Tax Court (BFH) on 21 December 2022 held (I R 53/19) that the shareholder of a corporation is not entitled to challenge a notice of assessment issued against the corporation concerning the separate assessment of the amount of the tax-specific capital contribution account.


A foreign corporation that held interests in a German GmbH made contributions to the GmbH that were not declared as the part of the GmbH’s tax return. Subsequently, tax assessments were levied on distributions by the GmbH to the foreign shareholder, on the grounds that such distributions were not tax-free repayments of contributions, and the shareholder appealed against the assessments.

The court found that under the corporate tax law, the amount of the tax-specific capital contribution account is established by a separate assessment addressed exclusively to the corporation. Thus, even though the shareholder may be affected by the tax assessed, only the GmbH, as the assessment's addressee, is entitled to appeal against that assessment. The shareholder is merely a third party, and a separate third party right of appeal cannot be recognized even in exceptional situations.

Read a March 2023 report [PDF 376 KB] prepared by the KPMG member firm in Germany


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