Gift tax on low-interest loans - who bears the burden of proof?

The interest rate is particularly relevant for loan agreements between related parties. If no arm's length interest rate can be determined for a comparable loan, the statutory interest rate of 5.5% is to be used for taxation purposes. In this respect, the Federal Fiscal Court has now decided, in deviation from the Mecklenburg-Vorpommern tax court, that the burden of proof of a fixed interest rate does not have to lie with the taxpayer. In her article, POELLATH tax advisor Nikola Hertel provides an insight into the latest case law and the resulting practical consequences.