It has taken 12 months, but new legislative provisions are now in place to deal with the problems for representatives of incapacitated entities arising from Logan J's decision in Deputy Commissioner of Taxation v PM Development Pty Limited [2008] FCA 1,886.

The new provisions go beyond merely addressing the outcome of PM Developments. They also introduce new obligations for representatives of incapacitated entities as well as some concessions and protections.

Increasingly, formal restructures, whether solvent or insolvent in nature, are closely aligned to court-supervised processes, adding certainty and transparency to the restructuring process.

In handing over any documents in litigation or Court process, you must assess whether or not the documents have tax relevance.

German legislator finally introduces tax exemption for income resulting from debt waivers in restructuring scenarios with retroactive effect.

To date, a debt waiver has been frequently used as a tool to successfully restructure German-based companies in financial difficulties.

To date, a debt waiver has been frequently used as a tool to successfully restructure German based companies in financial difficulties. A decision of the German Federal Fiscal Court (Bundesfinanzhof) published on February 8, 2017 currently limits such an option, given that it held that one of the main instruments used by tax authorities to grant relief from an otherwise taxable cancellation of debt income (CODI) in the form of the so-called Restructuring Decree (Sanierungserlass) violates fundamental constitutional rights.

Legal & Regulatory

BRRD: FCA publishes modification by consent for Article 55 rules

Restructurings have become an integral part of the reality of the German debt and equity markets.

Amendments to the rules of deductibility of interest expenses

Further restrictions to deductibility of interest expenses incurred in relation to a share purchase¹

Background