In its judgment of 1.4.2026 (I R 11/24), the Federal Fiscal Court ruled on the deductibility for tax purposes of impairments of an interest claim. This ruling is of great importance for medium-sized companies because it shows how financing can be set up in a tax-efficient way.
The plaintiff was a limited liability company whose shares were held entirely by an individual person. This person also held a majority stake in another GmbH. In this respect, both companies were sister companies. The plaintiff an interest-bearing loan to its sister GmbH. Due to the economic situation, a subordination agreement was concluded. Subsequently, the claim for interest payment against the borrower was written down by the plaintiff.
The Federal Fiscal Court had to decide whether this depreciation is to be added back to the off-balance sheet pursuant to section 8b (3) sentence 4 et seq. of the Corporate Income Tax Act. According to this standard, a reduction in profits in connection with a loan claim is not accepted for tax purposes if the shareholder (or an affiliated person) holds at least 25% of the borrower's shares. This was intended to prevent so-called capital-replacing loans instead of a capital injection.
The Federal Fiscal Court first decided that an interest claim is not a loan within the meaning of this provision and is not economically comparable to the granting of a loan. A loan as well as an economically comparable legal relationship requires a financing purpose. This may be the case in the case of a conversion into a loan receivable by novation. A loan relationship can also be assumed if a claim is left standing for an unusually long period of time. However, neither was the case here.
In the opinion of the Federal Fiscal Court, such situations, in which the claim exists between two sister companies, both of which are held by the same individual person, are not covered by section 8b (3) sentence 4 et seq. of the Corporate Income Tax Act. It is true that, pursuant to section 8b (3) sentence 5 of the Corporate Income Tax Act, the denial of deduction is also to be applied to related parties. However, the wording of the law is based on the fact that it must be a person "close to the shareholder". The Federal Fiscal Court ruled that this must be the shareholder within the meaning of section 8b (3) sentence 4 of the Corporate Income Tax Act. However, this can only be a corporation. The Federal Fiscal Court also sees this result as being covered by the meaning and purpose of the provision. The provision was intended to prevent circumvention arrangements in which a capital injection through so-called equity-replacing loans is avoided.
The ruling shows how financing within a group of companies can be structured in order not to trigger an unnecessary tax burden even in the event of poor liquidity or payment defaults. Especially in times of unforeseeable economic development, attention should be paid to this.
The ruling also has implications for transaction financing, especially in SMEs. Multi-stage acquisition structures are often chosen in order to be able to claim the corporate income tax privilege for any distributions or capital gains. According to the new Federal Fiscal Court case law, such structures should be reviewed to see whether companies that foreseeably need to be supported with shareholder loans are better financed by a sister company instead of via the parent company. Before an acquisition, the most tax-efficient acquisition structure should be assessed on a case-by-case basis.
