|Author (Person)||Becker, Johannes|
|Series Details||Vol.43, No.10, October 2015, p589–594|
|Publication Date||October 2015|
|Content Type||Journal | Series | Blog|
In its decision dated 17 December 2014, I R 23/13,1 the Federal Tax Court (BFH) defined its opinion on the barrier effect of Article 9 of the double taxation treaty with the USA in cases involving the arm’s-length principle more precisely. The author show the consequences of that decision for the German treaty policy and points out that there can be no doubt that Germany is following a restrictive approach applying Article 9 paragraph 1 OECD Model Convention (OECD-MC). Hence domestic tax law can solely be applied if it is not contrary to the arm’s-length principle. Furthermore, the author shows that the BFH had accepted the group support as being part of the arm’s-length conditions for unsecured loans. In consequence it is convincing that the BFH rejected the view of the tax administration, which had not allowed a current value depreciation due to domestic tax law, i.e., section 1 Foreign Tax Act.
|Countries / Regions||Germany|