Incongruent profit distributions: New Federal Ministry of Finance circular extends tax scope of application

The tax treatment of mismatched profit distributions is a widely discussed topic in practice. With the new Federal Ministry of Finance circular dated 04.09.2024, the tax authorities have referred to current case law in which the Federal Fiscal Court has extended the tax recognition of incongruent profit distributions. The article highlights the effects of the Federal Ministry of Finance letter and provides an outlook on issues that still need to be clarified.