20.09.19

Federal Fiscal Court confirms case law on so-called Combined Contracts

In a legal dispute between a Berlin group of house builder owners and the local tax office, the Federal Fiscal Court has confirmed the limits already drawn in 2013 for the (excessive) application of the principles of the so called Combined Contracts in the assessment of real estate transfer tax.

BMH BRÄUTIGAM had already represented the client before the fiscal court. Since the emergence of the concept of the builders group, the diverse corporate structures of such companies have repeatedly led to problems and disputes with tax offices in the assessment of the real estate transfer tax. The Second Senate of the Federal Fiscal Court (II R 28/15) has now confirmed that the application of the principles of Combined Contracts presupposes that the persons acting on the seller's side are obliged to change the physical condition of the property. I.e. the question whether the property as well as the other services and benefits in kind were offered combinedly by a sellers’ side is just as irrelevant in the absence of a production or redevelopment obligation on the part of the seller as is whether the contracts are objectively closely related and whether the purchaser was legally or even only economically bound with regard to the certain defined development when the property purchase contract was concluded. If the seller is not obliged to change the physical condition, the value of the developed property cannot be used as a basis for RETT.                                                                                                                                                                                                                                                                                                       Team BMH BRÄUTIGAM: Dr. Andrea Reichert-Clauß (Corporate), Heinz Winkler (Litigation)