New ruling on exit tax by the Bundesfinanzhof
In its ruling of 21.12.2022 (case reference: I R 55/19), the BFH contradicted the fiscal administration to-date that has stipulated that there should be an intention to return (together with the respective credible demonstration) when the move happens. The BFH has now decided that for the return provision to apply it is not necessary for the shareholder to have the intention to return already at the time when the move away from Germany occurs. If the original termination of the unlimited tax liability status was based on a merely temporary absence by the shareholder and if within seven years after terminating the unlimited tax liability status in Germany they once again have unlimited tax liability then, under certain conditions, the tax claim will once again be cancelled. The BFH judges did not see an adequate basis in the wording of the legislation for the criterion of an intention to return already at the time when the move happens.