1996 Fiscal Year Final Research Report Summary
Study on the German Taxation of Fiscal Unity
| Project/Area Number |
07630120
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Accounting
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| Research Institution | Niigata University |
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Principal Investigator |
KINOSHITA Katsuichi Faculty of Economics, Niigata University Professor, 経済学部, 教授 (40018643)
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| Project Period (FY) |
1995 – 1996
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| Keywords | German corporate taxation / Group taxation / Fiscal Unity system / Consolidated accounting / Consolidated taxation / Business taxation / Parent and subsidiary / Harmonization of european taxation |
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| Research Abstract |
In common with most industrial countries, Germany has a complex taxation system. All german tax laws are prechribede by Federal Actsof Paraliament. This german legal system has led to the development of a collection of different taxs. The german corporate taxation refers to the sum of all the taxs levied on a business which need to be taken into account when estimating or establishing th total tax burden to be borne by that business, rather than to anyone single tax system. The various taxs can classified into three groups, taxs on income, taxs on capital, excise taxs. German taxation is therefore levied on income, capital, and on comsumption. The development of the german taxation is recently subject to EC harmonisation. This has led to a signaificante relaxation of the tax rules on international mergers. The development of the german tax system can be said to have recently entered a process of reorientation.
A company in Germany is as a legal person, subject to corporation tax. Shareh
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olders are liable to income tax or corporation tax on the dividends they receive. Their obligation is independent of that of the company, although the two tax burdens are linked by the credit mechanism.
Companies with a German seat or place of manegement are subject to corporation tax on their worldwide income. Taxable income is determined in accordance with the princiles laid down in the Income Tax Act as modified by specific provisions of the Corporation Tax Act.
If a company is integrated into another business to such an extent that it, effectively, merely represents a department or a division of that business, the two (or more) units together constitute an Organschaft. The main business is referred to as the parent and the subordinate company as the subsidiary. If the subsidiary undertakes to transfer is entire profit to the parent (profittransfer agreement), that profit will not be taxable in the hands of the subsidiary, but rather, will be combined with the taxable results (profit or loss) of the parent. Less
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