MSI's German multi-disciplinary member firm Abels Decker Kuhfuss Lenzen & Partner (ADKL) announces the European Court of Justice ruled in favour of the petitioner, and declared the German Inheritance Tax Law to be in breach of European Union Law.
In its verdict dated June 8, 2016, C-479/14 “Hünnebeck”, the European Court of Justice (ECJ) ruled in favour of the petitioner and declared the German Inheritance Tax Law to be in breach of European Union Law.
For the first time, the ruling of the ECJ refers to Section 2 para. 3 German Inheritance Tax Law, containing the option for full tax liability, which the German legislator had introduced as a consequence of the “Matter”- ruling of the ECJ and the following treaty infringement proceedings in 2011.
The “Hünnebeck”-ruling has set one thing clear: The new German Inheritance Tax Law does not comply with the Principle of Free Movement of Capital (Art. 63 TFEU). The legislator is now obliged to revise the Inheritance Tax Law once again.
The petitioner, being a resident of a EU-member state, was a co-owner of a property in Düsseldorf. In 2011, she transferred the co-owned part of that property as a donation to her two descendants half each. As there were no personal connections to the domestic jurisdiction, the only connecting factor to the German Inheritance Tax Law was the location of the property, making this a case of a limited inheritance tax obligation.
The case was handled by ADKL's partner Marc Sarburg (certified accountant / attorney-at-law / tax advisor).
