159. Effective Date of the 1995 Tax Reorganisation Act

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In 1995, a new tax reorganisation law went into effect in Germany which is in many ways more favourable to the taxpayer than the prior law. For details see article no. 5. The new law is applicable by the terms of its sec. 27 to transfers of property based on legal acts taking effect after 31 December 1994.

In its decision of 19 May 1998 (DStR 1998, 1355), the Federal Tax Court has held that a merger pursuant to a merger agreement executed on 12 December 1994 is not subject to the new tax reorganisation law even though the merger was not registered in the Commercial Register until November 1995 and even though its effective date was 1 January 1995.