Tax changes for individuals and families

In addition to numerous changes for companies, the Tax Amendment Act 2015 also contains some changes that affect families, capital investors and other private individuals.

Even though the Tax Amendment Act 2015 passed by the Bundestag and Bundesrat primarily brings changes for companies, there are a few changes that only affect private individuals and families. For example, the tax identification number must now be provided in even more places. Here are the changes for individuals, families and capital investors:

• Maintenance: As a prerequisite for the special expense deduction of alimony and equalization payments to avoid pension equalization, the taxpayer must in future provide the tax identification number of the alimony recipient. If the recipient refuses to provide the identification number, the number may be requested from the competent tax office.

• Capital gains: Banks will now be required by law to apply the tax authorities' legal interpretation to the final withholding tax. This counteracts a ruling by the Federal Fiscal Court that could lead to inconsistent application of the tax. If an investor has a different legal interpretation, he will therefore always have to fight this out with the tax office in the future. In addition, only investors with unlimited tax liability will be able to submit an exemption order in the future. An earlier amendment had led to an unintended extension to investors with limited tax liability.

  

• Dividend payments: The German Income Tax Act will be amended to reflect a change in the German Stock Corporation Act, according to which the dividend claim will become due at the earliest on the third business day following the date of the resolution by the Annual General Meeting on the appropriation of profits. This avoids capital gains tax becoming due before the dividend is received.

• Inheritance tax: As of the promulgation of the law, the heir or donee must also provide the tax identification numbers of the persons involved in the acquisition when reporting. For asset custodians and administrators, insurance companies as well as courts, authorities and notaries, a corresponding adjustment will be made at a later date. Furthermore, in the case of an inter vivos gift, both the donor and the donee will in future be parties to the proceedings in the assessment procedure, even if the donor assumes the gift tax. In addition, in the future there will be a separate and uniform assessment procedure for all parties involved in order to prevent different bases of assessment for individual parties.

• Grants: The tax exemption for gifts to charitable and other tax-privileged organizations is merely clarified. For gifts to foreign organizations, on the other hand, the proof of their qualification as a tax-privileged donee is fundamentally redefined. As it is generally advantageous, this amendment applies to all cases that are still open.