According to the election platforms, companies can hope for more tax incentives for research and development.
Despite the election campaign, however, there was by no means a standstill on the tax front. Further progress has been made on numerous measures related to combating harmful tax competition and the aggressive tax regimes of international companies. On 1 January 2018, for example, the “royalties barrier” comes into force, whereby German lawmakers have actually exceeded the requirements developed at international level. In June 2017, Germany signed the so-called "Multilateral Instrument" with almost 70 additional nations. This will make it possible in the future to adapt a large number of existing double taxation agreements between the participating countries to internationally agreed standards using a dynamic procedure - and thus more quickly than through bilateral negotiations. In addition, in September 2017, EU finance ministers agreed on a joint initiative to counter the tax avoidance strategies of global Internet companies.
A European Court of Justice proposal from the Federal Tax Court, which is being pushed forward by our firm and deals with the question of the EU lawfulness of the CFC rules, is causing quite a stir. This procedure is likely to be a reason for reforming foreign tax law in the new legislative period.
Tax law and tax enforcement are subject to changes in social and economic conditions. As digital technology increasingly affects all areas of life, the increasing global economic integration and demographic development pose great challenges. To this end, the legislature has implemented measures for the technical, organizational and legal modernization of the taxation procedure, which will mainly take effect from 2018. Whether this will benefit taxpayers and not just the tax authorities will be shown in the practical application.
Supposed tax simplifications will come into force on 1 January 2018 with the investment tax reform. In many cases, retail investment funds will become less attractive due to the new tax regulations.
The reform of statutory audits by the EU and the German Implementation Act (Audit Reform Act) has resulted in a change to the auditor's report in the audit opinion. In order to increase the meaningfulness of the audit opinion, to avoid misunderstandings about the tasks and content of the audit ("expectation gap") and to ensure internationally uniform reporting, the relevant IAASB international standards were introduced into German law. In the case of public interest entities (PIEs), the amended reporting must be implemented for fiscal years ending after June 16,2017. For all other companies, initial application is planned for 31 December 2018 at the latest.
Companies are also concerned with the new requirements of the CSR Directive Implementation Act, which stipulates that non-financial issues must also be presented in the management reports. In particular, this requires information on labor, social and environmental issues, respect for human rights and the fight against corruption.
Lastly, companies should by no means ignore the basic data protection regulation that will enter into force in 2018. This makes data protection one of the biggest compliance risks in companies. Companies will have to draw up and maintain a concrete plan of measures to implement the special technical and organizational specifications, otherwise, they may have to pay draconian fines—not to mention the significant damage to their reputation that this could cause.
What still awaits taxpayers in 2018, what developments in tax and business law have taken place in 2017, and what arrangements might still be worthwhile in view of the new year, have been briefly and succinctly outlined by numerous specialist authors of Ebner Stolz in the guide "Changes in Tax and Business Law 2017/2018", the fifth edition of which has been published by Stollfuß Verlag. The guide is rounded off by an assessment of current tax policy by the Federal Association of German Industry.