072. Draft Directive on the Exchange Opinion

KPMG Germany Webpage
Click on the above link to visit the KPMG Germany webpage on the Mondaq website
For disclaimer and copyright see end of this article.

1. Introduction

In early April of this year, the Federal Ministry of Finance released a draft directive summarising the position of the tax authorities with regard to the so-called "exchange opinion" rendered by the Federal Tax Court almost 40 years ago. Handed down on 16 December 1958 (BStBl III 1959, 30), the "exchange opinion" is a ruling by an en banc panel (Grosser Senat) of Germany's highest tax court that the exchange of shares in one corporation for shares in a second corporation will by way of exception not result in taxable gain to either party if the shares exchanged are economically equivalent in value, type, and function.