Cross-border company split: Recognition by the Federal Court of Finance (BFH) and potential effects also on foundations

The tax consequences of a company split are as simple as they are far-reaching: the owner company does not carry out any asset management activities, but becomes a commercial enterprise. If the holding company is a charitable foundation, the company split leads to a taxable economic business operation. In its ruling of 17.11.2020 (I R 72/16), the Federal Court of Finance (BFH) has now decided for the first time that these tax principles also apply if the operating company has its registered office and place of management abroad. Stefan Weinberger discusses the decision in the Handelsblatt Steuerboard.