Clifford Chance
Federal Fiscal Court clarifies determination of German rental income for foreign investors
21 April 2017
With decision dated 7 December 2016, published on 5 April 2017, the Federal Fiscal Court (FFC) clarified to what extent foreign investors investing in German real estate are subject to German taxation. Without a permanent establishment or representative in Germany, foreign investors in Germany are subject to German taxation only with regard to their German source income such as rental income or capital gains from dispositions of German real estate. The court ruled that a "profit" from a waiver of a loan relating to German real estate shall not be taken into account.
