Germany’s Tax Exemption for Family Businesses Ruled Unconstitutional

As I have previously discussed, Germany’s inheritance tax exemption for family operated companies was challenged in Germany’s Constitutional Court. The court held yesterday that the current inheritance tax breaks for the family businesses are unconstitutional because they fail to give equal treatment to individuals and companies. The current exemption rules will continue for now, as lawmakers have a deadline for remedying the problem of mid-2016. However, lawmakers may be able to create a system that is more limited than the current rules that still offers some tax breaks to these companies.

See Reuters, German Court Declares Tax Breaks for Family-Run Firms Unconstitutional, The Economic Times, Dec. 17, 2014.