Prepayments made as “harmful” administrative assets
In its decision of February 1, 2023 (Case No. II R 36/20), the Federal Fiscal Court (BFH) made important findings for the application of the inheritance and gift tax exemption regime for business assets. According to this ruling, advance payments made do not constitute “harmful” and thus generally taxable administrative assets if they have been made for items that would not constitute administrative assets if they had already been capitalized in the balance sheet. In its decision, the BFH invalidates the argumentation patterns of the tax authorities and thus, fortunately, contributes to orientation and legal certainty, in particular for taxpayers.