Cologne tax court 30.11.2023 - 7 K 217/21: Gift tax for family foundations abroad

The establishment of a foreign family foundation is subject to inheritance or gift tax in Germany amounting to 30 or even 50 percent of the transferred assets. In contrast, there is a so-called tax class privilege for domestic family foundations, which results in a significantly lower tax burden. In a recent ruling, the Cologne tax court has expressed doubts as to whether this unequal treatment is compatible with European law and has referred the case to the ECJ for a preliminary ruling. In the current issue of RFamU, Dr. Michael Feldner discusses the decision of the Cologne tax court and outlines the current legal situation.