At the beginning of our Expert Briefing organized in cooperation with PricewaterhouseCoopers on June 28, 2023, Christoph Letzgus, Partner, PwC Germany, introduced the audience to recent developments of the treatment of re-organizations from their initially domestic roots to a gradual extension to certain intra-EU/European Economic Area transactions in 2006, a further Brexit specific temporary relief to a partial globalization in German corporate tax law from 2022 on. He also pointed out the still existing limitations and practical issues in matching corporate tax deferral rules with sometimes still insufficient corporate law mechanisms.
In the second part of the presentation, Dirk Krome, Lawyer and Tax Consultant, PwC Legal Germany, shed light on the latest legal developments in Germany and dealt in particular with cross-border changes of legal forms and the implementation of the EU Directive on cross-border conversions, mergers and divisions (EU Directive 2019/2021) in Germany (Gesetz zur Umsetzung der Umwandlungsrichtlinie), which provides for a legally secure EU/EEA-wide compatible procedure for respective cross-border reorganizations of stock corporations, partnerships limited by shares, and limited liability companies.
The EU Directive 2019/2121 set a deadline of January 31, 2023 for the implementation in the individual EU member states. In early 2023 Germany implemented the directive by two acts. In the meantime, about half of the EU countries have implemented the EU requirements. In the other EU countries, the implementation is still outstanding.
During the briefing, various case study scenarios were discussed in more detail from a tax and from a legal perspective, including cross-border conversions, mergers, spin-offs, and share-for-share transactions.
Mr. Letzgus and Mr. Krome discussed several practical approaches to meet business goals. They finally concluded that each fact pattern requires its separate analysis to find an optimal solution in its specific circumstances.
