Federal Fiscal Court (BFH) takes a position on the implementation of profit and loss transfer agreements

Up to now, it has not been clarified by the highest courts whether or which requirements have to be met for the actual implementation of a profit and loss transfer agreement. Among other things, it was unclear whether a claim arising from a profit and loss transfer agreement had to be properly accounted for in the balance sheets of the controlled company and the controlling company. A recent ruling by the German Federal Fiscal Court (BFH) now provides more legal certainty.