Dr. Philipp Gold, Lawyer, Tax adviser and Partner at Momentum and Sarah Kaspar, Lawyer and Associate at Momentum, have published in the new issue of GWR (Zeitschrift für Gesellschafts- und Wirtschaftsrecht, issue 2/2022, page 37 et seq.).
The publication covers a ruling of the German Federal Fiscal Court (Bundesfinanzhof) dated 09.06.2021 (Ref. I R 32/17) regarding income adjustments pursuant to Sec. 1 (1) AStG in the case of the granting of unsecured loans to affiliated controlled companies due to a lack of arm's length.
The BFH had already issued a pilot ruling on the question of the applicability of Sec. 1 (1) AStG and has denied a blocking-effect of Art. 9 I OECD-MustAbk on February 27, 2019 (Ref. I R 73/16).
In the ruling of 09.06.2021, the BFH provided further guidance on the factual element of arm's length in Section 1 (1) AStG, as well as on the legal consequence of the priority of interest adjustments.