On the application of Section 8b (4) sentence 6 KStG in the case of several share acquisitions during the year (so-called block acquisition)

According to Section 8b (1) sentences 1 and 2 of the German Corporation Tax Act (KStG), taxable profit distributions within the meaning of Section 8 (1) KStG, Section 20 (1) no. 1 and (8) EStG are generally not taken into account when determining the income of the corporation, provided that these payments have not reduced the income of the distributing holding company as open or hidden profit distributions. In this case, 5% of these tax-exempt emoluments are deemed to be expenses that may not be deducted as operating expenses in accordance with Section 8b (5) sentence 1 KStG. Notwithstanding section 8b para. 1 sentence 1 KStG, the remuneration in question must nevertheless be taken into account when determining income in accordance with section 8b para. 4 sentence 1 KStG if the shareholding providing the distribution directly amounted to less than 10% of the share capital or nominal capital of the distributing corporation at the beginning of the calendar year. According to Section 8b para. 4 sentence 6 KStG, the acquisition of a shareholding of at least 10% is deemed to have taken place at the beginning of the calendar year. In its decision of 06.09.2023 (I R 16/21, DB 2024 p. 157), the BFH has now commented on the question of which situations are covered by the exception in section 8b para. 4 sentence 6 KStG.