C A GmbH managed an unsecured clearing account for a Belgian subsidiary. After financial difficulties in the Belgian subsidiary, C A GmbH waived their claim from the clearing account and booked this in their balance sheet as a loss. However, the tax office disallowed the loss according to § 1 Abs. 1 AStG. Up until now, the Bundesfinanzhof has assumed for cases that are subject to a double taxation agreement (DTA), that Art. 9 para. 1 OECD was limited to so-called price corrections, while the non-recognition of a loan claim or a partial depreciation was excluded (so-called Blocking effect). The Bundesfinanzhof overturned the previous judgment of the FG. According to the court it was not necessary to determine whether it was really a tax credit or a contribution of equity to the Belgian subsidiary. However, this could be left out, since the profit-reducing waiver by C A GmbH should be corrected in any case according to § 1 Abs. 1 AStG. A ... Read more