German legislator finally introduces tax exemption for income resulting from debt waivers in restructuring scenarios with retroactive effect.
Germany, Insolvency & Restructuring, Tax, Latham & Watkins LLP, Tax exemption, Debtor, Waiver, Limited liability partnership
The reform of claw-back rights in German insolvency proceedings which provides for more legal certainty for creditors has become effective on 5 April 2017.
To date, a debt waiver has been frequently used as a tool to successfully restructure German-based companies in financial difficulties.