Loss forfeiture provision was set aside
In reaction to the financial crisis, the loss forfeiture provision was set aside in
respect of share acquisitions within the context of a corporate recovery
programme designed to save a troubled business.
To qualify, the company had
to show that it had concluded, and was following, a shop agreement on job
preservation, that the total employee remuneration paid during the five years
following the share transfer was at least equal to 400% of the annual average
paid in the five years before, or that shareholders had contributed new capital of
at least 25% of the gross assets shown in the immediately preceding tax balance
sheet within one year following the acquisition. The European Commission
formally notified Germany that it regarded this general aid to corporate
recovery as unlawful state aid and demanded amendment of the statute. The
German appeal against this decision was rejected by the ECJ as having been
filed out of time; however the government is supporting a number of private
appeals currently pending. For the moment, the provision is in abeyance.
Losses are not transferred on merger or other corporate reorganisation.
EU Forecast
euf:ba18e:164/nws-01