Detrimental acquisition of shares in the case of a tax group
For transfers of shares in corporations that result in a significant change in the shareholding structure, the special loss deduction regulation of Section 8c KStG must be observed. If more than 50% of the shares are transferred directly or indirectly within five years, negative income that has not been offset or deducted (“unused losses”) up to this so-called detrimental acquisition of shares can no longer be deducted in full. If the detrimental acquisition of shares takes place during the current financial year, the relevant BFH case law allows any profit made up to that point to be offset against the unused loss.
However, the question of whether it is possible to offset the results of the tax group parent and the tax group subsidiary during the year in the event of a detrimental acquisition of an interest in an entire tax group structure has not been clarified. The BMF circular dated November 28, 2017, margin no. 37 (BStBl. I 2017, 1645) provides for the loss deduction restriction of Section 8c KStG to be applied separately at the level of the controlling company and at the level of the controlled company. In the event of a detrimental acquisition of an interest in a tax group parent, there is also an indirect detrimental acquisition in the tax group subsidiary and its negative tax group income that has not yet been allocated is (in itself) subject to the deduction restriction of Section 8c KStG. The Düsseldorf Fiscal Court had the opportunity to comment on this in its decision of December 9, 2024 (case no. 6 K 1772/20 K,G,F).
In the case in dispute, there was a multi-level tax group structure. All shares in the foreign parent company of the top German tax group parent were then sold during the year to a purchaser from outside the group. This undisputedly constituted a detrimental acquisition within the meaning of Section 8c KStG. The tax office denied a deduction or offsetting for the losses incurred by the controlled companies up to the time of this acquisition and only attributed the losses incurred after the reporting date to the controlling company. The tax office did not allow the requested consolidation of results during the year based on the principles of the above-mentioned BMF circular. The Düsseldorf tax court took a different view.
Against the background that the question of the interaction of the loss deduction restrictions of Section 8c KStG (and Section 10a GewStG) with the attribution of income in the case of a consolidated tax group in accordance with Sections 14 et seq. KStG is neither unambiguously regulated in the law nor clarified by the Federal Fiscal Court, the Düsseldorf Fiscal Court argued that the loss during the year up to the harmful acquisition should also be taken into account in the case of a tax group.
This is because the losses incurred under the old control and the old economic identity of the company must be excluded from the elimination of losses. A separate application of the loss deduction restriction at each level of the tax group would contradict the purpose of the standard. Therefore, in the opinion of the tax court, the proportionate loss of the controlled companies up to the harmful acquisition was to be deducted from the total amount of income of the controlling company in the case in dispute. This also applies at trade tax level.
The additional claim for the determination of a remaining loss carryforward tied to continuation within the meaning of Section 8d KStG did not exist in the present case due to a lack of compliance with the statutory requirements: On the one hand, the tax group companies concerned were also tax group parents and, on the other hand, the tax group parent status meant that there were several business operations and therefore not exclusively one and the same business operation. Incidentally, this requirement is interpreted extremely strictly and is not subject to any considerations of insignificance or constitutional restrictions.
