No Retroactive Application of Sec. 1(3) of the Foreign Tax Act to Business Restructurings before 2008

This article explores when the new German rules on transfers of functions (business restructuring) apply to taxpayers with different financial years. Moreover, it illustrates that the retroactive application of these rules does not meet the necessary requirements under constitutional law, so that the rules can be applied in a lawful manner only to transfers taking place in tax assessment periods from 2008 onwards.