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In the early stages of M&A transactions, it is often unclear how the target companies are to be finally allocated within the purchaser's group of companies. For this reason, share purchase agreements setting forth the provisions governing share deals frequently contain clauses that enable the purchaser to name one company of its group as the entity acquiring the shares prior to the closing of the purchase agreement. In the main proceedings, the Fiscal Court Cologne (file no. 5 K 235/11) ruled that the conclusion of the share purchase agreement and the exercise of the right to name the acquiring entity or the transfer of the shares to the named acquiring entity, as the case may be, triggered real estate transfer tax twice. In its judgment of 12 May 2016 (file no. II R 26/14), the Federal Fiscal Court (Bundesfinanzhof; BFH) now commented on this approach for the first time, stating that it did not share the Fiscal Court Cologne's point of view.

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