BFH rules for the first time on the retroactive applicability of Section 6e EStG

In its ruling of July 15, 2025, the Federal Fiscal Court (BFH) confirmed for the first time that the retroactive application of Section 6e of the German Income Tax Act (EStG) does not violate the constitutional prohibition of retroactive effect. This provision reclassifies certain expenses as acquisition costs. From a constitutional perspective, it was questionable whether Section 6e EStG also applies to financial years prior to its introduction and thus has a genuine retroactive effect. The decision was based on expenses incurred by a real estate project development company, which the tax authorities wanted to treat not as expenses but as incidental acquisition costs under Section 6e EStG. Raphael Baumgartner and Michael Forchhammer summarize in their article why the court ruled as it did and whether the decision could also be relevant for other types of funds.