The managing holding company - commercial or asset-managing?

In its ruling of 27.11.2024 (I R 23/21), the BFH outlines criteria and indications that are relevant to the important question of when the threshold from asset management to commercial activity is crossed. The question was under which conditions a holding partnership can be recognized as a controlling company in the context of a corporate tax group. The BFH explained when the management activities of a holding company qualify as sufficiently commercial within the meaning of Section 14 para. 1 no. 2 KStG. The decisive factors here are not additional operational activities or paid services, but the actual and documented management behavior as well as the decision-making and enforcement powers vis-à-vis the subsidiaries. The decision has far-reaching consequences that go beyond the fiscal unity and provides valuable guidance for the tax assessment of holding structures.