Newsletter Lexunion Nº15 – 3T 2018

Newsletter Lexunion Nº15 – 3T 2018


We are glad to let you know that the 15th edition of the Newsletter of our network LEXUNION is now available.

It’s a free quarterly newsletter that deals with legal and tax developments in member countries of the Lexunion network, with the purpose to help french compagnies and persons clients of our network.

It can be downloaded on this link: Newsletter client – Lexunion 15-2018_FR_EN


Judgement of the CJEU of 1 March 2018: German matrimonial regime and consideration of paragraph 1371(1) of the BGB as succession-related

The question as to whether paragraph 1371(1) of the Bürgerliches Gesetzbuch (Civil Code; ‘the BGB’), is to be regarded as relating to a succession regime or a matrimonial regime has been argued over inter partes for years. The CJEU has now put an end to this dispute.

In the terms of a judgement dated 1 March 2018, the Court of Justice of the European Union (CJEU) ruled that “Article 1(1) of Regulation (EU) No 650/2012 […] must be interpreted as meaning that a national provision, such as that at issue in the main proceedings, which prescribes, on the death of one of the spouses, a fixed allocation of the accrued gains by increasing the surviving spouse’s share of the estate falls within the scope of that regulation.”

The CJEU therefore ruled in favour of its being regarded as relating to a succession regime. As a result paragraph 1371(1) of the BGB, now applies only on the dual condition that 1) the spouses are married under the German legal regime and 2) the succession is subject to German law.

Paragraph 1371(1) of the BGB as it relates to the German legal regime of Zugewinngemeinschaft, a property regime of community of accrued gains, states that “If the property regime is ended by the death of a spouse, the equalisation of the accrued gains shall be effected by increasing the surviving spouse’s share of the estate on intestacy by one quarter of the estate; it is irrelevant in this regard whether the spouses have made accrued gains in the individual case.”In other words, there is no liquidation of the matrimonial regime as such: the succession is liquidated directly, increasing the surviving spouse’s share by a flat quarter. A real liquidation of the matrimonial regime, with a calculation of the share due, takes place only if the surviving spouse renounces the succession or has been disinherited (paragraph 1371(2) of the BGB).

In private international law, the question as to whether this provision is to be applied when the spouses were married under the German legal regime but the succession of the deceased spouse is subject to a law other than that of Germany has long been debated. It all depends on the classification adopted: if considered as matrimonial regime, the flat quarter applies since the deceased was married under the German legal regime; if considered as succession regime, it does not apply since the succession is subject to a law other than the German law.

The judgement handed down by the German Supreme Court (Bundesgerichtshof) on 13 May 2015 stressed the classification as matrimonial regime, which led to the application of paragraph 1371(1) of the BGB whenever the spouses were married under the German legal regime, irrespective of the law applicable to the succession.

This position is called into question by the CJEU, which rules in favour of consideration as succession-related because “that provision does not appear to have as its main purpose the allocation of assets or liquidation of the matrimonial property regime, but rather determination of the size of the share of the estate to be allocated to the surviving spouse as against the other heirs.” (Section 40 of the judgement).

Apart from this, its classification as succession-related allows the flat quarter to be included in the European Certificate of Succession, with all the effects described in Article 69 of Regulation No 650/2012. (Section 42 of the judgement).


1.- Entry into force of the real estate wealth tax (IFI)

With effect from 1 January 2018 wealth tax (ISF) was replaced by the IFI (Impôt sur la Fortune Immobilière or Real Estate Wealth Tax).

The switch to IFI changes the taxable base, which now consists only of real estate assets.

Real estate is understood in the broad sense and concerns not only properties held directly but also those held through companies (notably “SCI” property ownership and management companies) or through any other vehicles (notably life insurance).

Holding real estate assets, the notion of “predominantly real estate” has been abolished.

Real estate assets used for the company’s business remain exempt.

The thresholds and tax rates are the same as those applying previously for the ISF: only persons with real estate assets worth more than €1.3 million are subject to IFI. Rates are progressive, from 0.5% to 1.5%.

Certain anti-abuse measures have been introduced regarding the treatment of liabilities associated with acquisition:

  • Only debts relating to the acquisition, repair, maintenance, improvement, construction, reconstruction or enlargement of real estate assets and to taxes due by reason of the holding of real estate assets (other than those normally incumbent on the occupant) are deductible.
  • Certain debts are non-deductible or only partly deductible for determining the value of the shares of a company holding real estate assets: in particular debts contracted by the company with shareholders (current account), close relatives or companies or entities controlled by such persons. There are some exceptions allowing such debts to be deducted.
  • Interest-only loans called ‘crédits in fine‘, or bullet loans, are deductible each year only up to the total amount of the loan less an amount equal to the total amount of the loan times the number of years elapsed since disbursement and divided by the total number of years of the loan. This rule does not apply when the bullet borrowing is contracted by the company.
  • Deductible debts are capped for persons holding more than €5 million in real estate assets in France if deductible debts amount to more than 60% of this total.

The new tax rules may offer opportunities for non-residents, particularly when the acquisition is or has been made through an SCI:

  • If the financing is by way of contribution in current account before 1 January 2018, this can be deducted from the value of the shares subject to the IFI;
  • If the financing is by way of contribution in current account after 1 January 2018, this can be deducted from the value of the shares subject to the IFI on certain conditions (the purpose must not be mainly tax-related, and the current account advance must not serve to repay the bank borrowing that financed the acquisition).
  • If financing was carried out by bank borrowing: the shares of the SCI will be valued taking account of this borrowing.
  • In the event of the taxpayer’s selling assets to a company that he owns, specific tax rules limiting the deductibility of the debt apply.

2.- Signing of a new tax treaty between France and Luxembourg

On 20 March 2018, France and Luxembourg signed a new tax treaty aimed at avoiding double taxation as regards income and wealth tax.

This treaty implements the recommendations of the OECD and the measures of the BEPS plan.

The accent is on the fight against erosion of the tax base: the new treaty introduces numerous anti-abuse mechanisms.

It could come into force on 1 January 2019.


Ineligibility of the filing with the Italian Business Register of a capital increase decision of a limited liability company (SRL) to be subscribed partly in crypto currency.

The Court of Brescia, business section, in a judgement of 25 July 2018, rejected the appeal lodged by a limited liability company pursuant to Article 2436, paragraph 3 of the Italian Civil Code against the refusal of the notary to file with the Business Register a resolution to increase the share capital of the company by contribution in kind, among other things, of a certain number of units of a crypto currency.

The notary justified the refusal to register by noting how the volatility of virtual currencies does not allow “a concrete evaluation of the quantum destined to pay up the subscribed capital increase”, or to evaluate “the effectiveness of the contribution”.

The Court declined to take a position on the general admissibility of virtual currencies as assets for contribution to the capital of a limited liability company (an issue which remains open), focusing instead on the existence of the requirements set forth in Article 2464, paragraph 2 of the Italian Civil Code (being an asset subject to economic assessment), with regard to the particular crypto currency that the shareholders intended to contribute in the specific case.

Thus, the crypto currency specifically concerned shows, in the opinion of the Court, “self-referential” features incompatible with the level of diffusion and publicity that a virtual currency must have in order to aspire to hold an effective presence in the market.


1.- Family

1.1. On 29 August, the Federal Council (executive) adopted a proposal for the partial reform of the succession law and submitted it to Parliament for decision.

Important change proposed: the part reserved to descendants would be reduced from ¾ to ½ of their intestate entitlement. Corollary: an increase in the freely disposable share of a testator’s estate.

1.2. The new provisions passed on 17 June 2016 by the Federal Parliament permitting, under national law, a person to adopt the child of his or her registered partner of either sex, entered into force on 1 January 2018. As for married couples, adoption is conditional in particular on the existence of a steady relationship that has lasted at least three years, and the adoptive parent must be at least 28 years of age.

2.- Companies

Swiss notaries may currently be in fear of losing their exclusive competence as regards so-called “simple structure” companies. The National Council, the first of the two legislative chambers, has agreed to dispense with the requirement for notarised deeds in this regard. The second chamber, the Council of State, has yet to pronounce, and its position seems much less clear. The notaries do hold one weighty trump card: trade registrars have come out against doing away with notarised deeds.

3.- Private international law

The Federal Council has still not finalised the draft law aimed at amending the federal law on private international law (LDIP in the French abbreviation) as regards “international succession law”, which it intends to submit to Parliament. This amendment has come about as a result of the entry into force of the EU Regulation on successions, with which the LDIP is supposed to be harmonised. That said, certain voices have called attention to the fact that Swiss law need not necessarily aim for “Euro-compatibility”, and that we must not forget all the other countries in the world where choice-of-law rules are sometimes different from those we are familiar with (notably nationality).

4.- Taxation

Switzerland is still not out of the woods as regards the revision of company taxation and the pensions system.

After two failed popular votes on these two subjects, parliamentarians championing compromise have proposed mixing the two subjects, which in themselves have nothing to do with one another. And this has been passed by Parliament! However, a referendum will no doubt be necessary, and obviously we do not know yet what the Swiss people will say in the last resort. Were they to reject the tax reform once again (particularly the abolition of certain favourable tax regimes), Switzerland would once again have serious problems with the European Union.■

Newsletter Lexunion Nº14 – 2T 2018

Newsletter Lexunion Nº14 – 2T 2018


We are glad to let you know that the 14th edition of the Newsletter of our network LEXUNION is now available.

It’s a free quarterly newsletter that deals with legal and tax developments in member countries of the Lexunion network, with the purpose to help french compagnies and persons clients of our network.

It can be downloaded on this link: Newsletter client – Lexunion 14-2018_EN-FRr


1.- Succession

In matters relating to certificates of succession, national jurisdiction is now determined solely by EU Succession Regulation no. 650/2012. Such was the ruling of the Court of Justice of the European Union (ECJ) in its order of 21.06.2018 (C-20/17 – Oberle). In this case, the deceased, a French national, had been the owner of property located in Germany and France. Upon his death, his son asked a court of first instance in Berlin to draw up a certificate of succession for the property in Germany. The court declared its lack of jurisdiction based on Articles 4 and 15 of the aforesaid Regulation. Following an appeal, the court of appeal sought a preliminary ruling from the ECJ to determine whether the jurisdiction provided for by the Regulation also applied to national succession certificates. The ECJ answered in the affirmative: international jurisdiction on succession, including certificates of succession, is governed uniformly by EU Regulation no. 650/2012. The latter stipulates that the jurisdiction of the country of last habitual residence is competent to rule on his entire estate. Therefore, French courts alone had competence to draw up the certificate of succession.

The Regulation does not apply in Switzerland since it is not a signatory. As a result, when a Swiss national having fixed property in Germany dies in Switzerland, the German authorities will continue to demand the production of a certificate of succession issued by German courts in order to settle the part of the estate relating to property in Germany even though Swiss law is applicable to the succession.


2.- Taxation

  • Treatment of French-source dividends

Reacting to two fiscal court judgments (Cologne of 31.08.2016 and Munich of 13.03.2017), the German tax authority published its decision to amend as from 2018 the taxation of French-source dividends received by German shareholders owning a stake of more than 10%, in a circular dated 13.03.2018, as from 2018. From now on, the rule of § 8b para. 5 KStG (Corporate Tax Act) providing for the total exemption of dividends from tax except for a 5% share of costs and charges will apply to French-source dividends whilst, due to its interpretation of Art. 20, para. 1 of the Franco-German Tax Agreement, this 5% sharewas only included previously when the actual costs and charges exceeded 5% (OFD NRW [Regional Tax Office North Rhine-Westphalia], 13.03.2018 – S 2750a-2014/0001-St 131).


  • Instruction of 20.04.2018

The German tax authority published an instruction dated 20.04.2018 in which it fixes the administrative principles applicable to the matter of determining whether a transaction carried out between a shareholder and the company can qualify as a gift and is, therefore, subject to the gift taxation system. In particular, it specifies that a 50% shareholder who transfers assets to the company without receiving the full consideration therefore does so by making a – taxable – gift to their co-shareholder (see Instruction no. 3). Likewise, a shareholder leaving the company and waiving full or partial payment of an indemnity does so by making a – taxable – gift to their co-shareholders – (see Instruction no. 2.5).



Within the framework of a revision of Swiss Company Law, the Swiss National Council (that is, one of the two Parliamentary chambers at Federal level) intends to introduce quotas for women of at least 30% on Boards of Directors and 20% in company management. However, nothing has been done so far as the Council of States still has to pronounce on the issue.

Following the resounding rejection of company taxation and old-age pension reforms, during referendums, the Council of State wishes to push the idea of a draft agreement that combines the two issues. It simply needs to convince the National Council and the Swiss people of the merits of this idea, in the knowledge that many political and economic players have already expressed their condemnation of such an agreement.■

Newsletter Lexunion Nº13 – 1T 2018

Newsletter Lexunion Nº13 – 1T 2018


We are glad to let you know that the 13th edition of the Newsletter of our network LEXUNION is now available.

It’s a free quarterly newsletter that deals with legal and tax developments in member countries of the Lexunion network, with the purpose to help french compagnies and persons clients of our network.

It can be downloaded on this link: Newsletter client – Lexunion 13-2018_en-fr


Deduction at source on dividends distributed to a non resident company

The European Court of Justice (ECJ) held in a decision of 20 December 2017 (C-504/16, C-613/16, Juhler Holding) that the2007-2012 version of the provisions of Article. 50d al. 3 EStG (German Income tax Act) was contrary to European law (parent company-subsidiary directive, freedom of establishment).

Said article governs the conditions of the reimbursement of the deduction at source in the event of a distribution of dividends to a non resident company. Under said provisions, said reimbursement provided for by the parent company – subsidiary directive was refused where(1st condition) it would have been refused if the shareholders of the parent company had been direct shareholders of the German subsidiaryand (2ndcondition) when one of the three following alternative conditions is met: (1) the foreign parent companycannot prove economic or other grounds for its interposition between its own shareholders and the German subsidiary; (2) the parent company’sown economic activity is not significant; (3) the parent company doesnot have a commercial organisation which allows it to achieve its company objects (number of employees, etc.).

In consequence, the ECJ dismissed theGerman Federal Central Tax Office (Bundeszentralamt für Steuern or BZSt) which refused to reimburse the deduction at source to a foreign company. Admittedly, said provision has been amended again since then, but there is still doubt on the legality of the current version and the Cologne Fiscal Court (Finanzgericht) has referred to the Court a preliminary question on said issue.


ITALY_______________________________________________________________________________1/ Advance dispositions of treatment

Article. 4 of the law December 22nd, 2017, no. 219 “Rules on informed consent and advance dispositions of treatment” – entered into force on January 31st, 2018 – allows subjects of age and capable of understanding and willing, in anticipation of a possible future inability to self-determine, to entrust a document containing advance provisions on health treatment, after having taken adequate medical information on the consequences of the choices made.

The deed containing the advance dispositions of treatment can have the form of a public deed or of an authenticated private agreement.

As for the tax aspects, pursuant to paragraph 6 of the art. 4, advance dispositions of treatment, even if drafted by public deed or authenticated private agreement, are not subject to registration obligation. They are also exempt from stamp duty and any other taxes and duties.

2/ Cancellation of the deed of incorporation of a joint-stock company

The Judge of the Register at the Court of Milan approached the issue of cancellation from the Companies Register of the deed of incorporation of a joint-stock company in which appears, as a single member, an attorney with a power of attorney then revealed to be false.

The Judge of the Companies Register can not order to cancel from the Companies Register a single member joint-stock company incorporated by a subject who later turned out to be a false attorney (falsus procurator).



Spanish Tax Authority is pressing hard over tourist renting platforms as AirBnB, Wimdu, Homeaway or Niumb.

Before next October 31st 2018, all those type of companies must inform the Spanish Tax Authority about all the transactions executed every quarter through their platforms, related to Spanish flats and indicating the name and identification of their clients renting homes in Spanish territory.

That obligation will be mandatory from next July 2018, so they will start informing about transactions made over the first quarter in 2018.

Real estate brokers, on the other hand, will have to include in their forms the identification of the building, its ID number, the number of days in which it has been rented for tourists, and the price received by the owner.