In early September, the European Parliament's Committee on Economic and Monetary Affairs (ECON) objected to the regulatory technical standards relating to the PRIIP Regulation proposed by the EU Commission. Thereafter, on September 14th, the European Parliament resolved to reject the Commission's proposal. The Commission must now submit a new delegated act that takes the EU Parliament's concerns into account. Therefore, the application date of the PRIIP Regulation will have to be postponed.

The German Supreme Tax Court ruled on April 16, 2016, on the determination of the calculation of foreign income as a basis for the foreign tax credit capability of a German tax resident. In this case, which dealt with the investment income of a German health insurance company, it was clearly stated that the expenses resulting from the set up of insurance technical accruals are predominantly caused by the insurance business itself and thus do not reduce the tax credit capability. However, expenses resulting from the administration of domestic and foreign investments are to be allocated to the income resulting from domestic and foreign investments. Thus, only that portion of administrative expenses allocated to the foreign income will reduce the foreign tax credit capability accordingly. The aforementioned case clarifies the tax credit capability of German health insurers, which was uncertain as of 2003 following a change in German tax laws. Although the decision was issued with regard to a German health insurance company, we believe that there are strong arguments for an application to life insurance companies as well. However, there is still no guidance issued by the German tax authorities on such a simultaneous application and so far no case law is available for life insurance companies.

On 13 July 2016, the German government passed the draft bill on the implementation of amendments to the EU Mutual Assistance Directive and other measures against base erosion and profit shifting (Entwurf eines Gesetzes zur Umsetzung der Än­de­rung­en der EU-Amtshilferichtlinie und von weiteren Massnahmen gegen Ge­winn­kür­zung­en und ‑verlagerungen). The draft provides for the implementation of the re­com­men­da­tions on Action 13 of the OECD BEPS project with regard to a country-by-country-reporting, amendments to the field of mutual assistance on ad­mi­nis­tra­tive cooperation in the field of taxation and a series of amendments of German tax law as a reaction to recent judgements of the German Federal Tax Court. This Client Information deals especially with these amendments which serve the purpose of putting certain concepts and opinions into law in those instances in which the court has taken a view contrary to that of the fiscal authorities and in favor of the tax payer.