Articles

1.Tax-Exempt Benefits That Can Help Attract and Retain Talent In Germany, from the perspective of attracting and retaining employees, it is becoming increasingly important not only to review salary levels but also to make use of fringe benefits that receive preferential tax treatment. In particular, amid continuing inflation and rising personnel costs, a simple salary increase can easily lead to higher social security contributions and overall personnel costs for the company, while the increase in the employees’ net take-home pay may be limited. In this respect, by making use of benefits in kind and allowances that meet certain requirements, it is possible to increase employees’ effective disposable income while keeping company costs under control. For Japanese companies with German subsidiaries as well, these systems are worth considering when recruiting and retaining local talent, designing compensation packages for expatriates and local management, and reviewing employee benefit programs. Benefits in Kind of up to EUR 50 per Month Employers may provide employees with benefits in kind of up to EUR 50 per month, generally free from wage tax and social security contributions. On an annual basis, this amounts to a benefit of EUR 600, which can effectively increase the employees’ net income.

1. Retention Periods of Commercial and Accounting Documents 2. GmbH Financing: Should Shareholder Loans Bear Interest or Not? 3. Wage Tax Withholding: New Regulations for the Allowance for Social Security Contributions Since January 1, 2026 4. Flat-Rate Wage Taxation for Company Events: Everything New from 2026? . 1. Retention Periods of Commercial and Accounting Documents At the turn of the year, the question often arises as to which documents and data can be disposed of or deleted. There are several aspects to consider here. Background Both commercial and tax law stipulate that business people must retain business and accounting documents — whether in paper form or as electronic data — for a certain period of time (Section 257 of the German Commercial Code, Section 147 of the German Fiscal Code (AO), Principles for the proper management and storage of books, records, and documents in electronic form and for data access (GoBD)). The length of the retention period depends on the type of documents or data: Different Periods for Different Types of Data The longest retention period of ten years applies, in particular, to trading books, inventories, opening balance sheets, and annual financial statements, as well as the work instructions and

1. Tax Return: 2026 Is Just Around the Corner – File Your Voluntary 2021 Tax Return Now and Benefit It feels like 2025 has only just begun, yet the end of the year is already fast approaching.Anyone who was not required to file a tax return for 2021 and has also not submitted a voluntary return should act quickly. The reason is simple: any tax refund for 2021 will be forfeited if the return has not been submitted to the tax office by 31 December, 2025. Applying for a favourable tax assessment under Section 32d (6) of the German Income Tax Act (EStG) after that date will not help. A taxpayer recently learned this the hard way before the German Federal Fiscal Court (BFH). The Assessment Period for Voluntary Tax Returns The tax office may only issue a tax assessment if the relevant assessment period (Festsetzungsfrist) has not yet expired. Once this period ends, the tax claim itself lapses (§ 47 German Fiscal Code – AO). As a result, any tax assessments issued after the expiration of the assessment period are unlawful (though not void) and may be challenged by filing a timely objection. Under § 169(2) no. 2 AO,

October 1, 2025 HLS Global Expands to Singapore  Tokyo, Japan / Singapore – HLS Global Co., Ltd. (“HLS Global”), a leading international accounting, taxation and business advisory firm, today announced the expansion of its global presence to Singapore by establishing its new subsidiary, HLS GLOBAL SEA PTE. LTD. (“HLS SG”), in Singapore. This expansion underscores HLS Global’s commitment to serving multinational companies across Southeast Asia. HLS SG will focus on providing a comprehensive range of services, including accounting, audit, tax, due diligence, post-merger support, ESG advisory, CFO services, and financial digital transformation.

1. Capital Expenditures that Constitute Acquisition Costs: Example of a Condominium According to Section 6 (1) No. 1a of the Income Tax Act (EStG), expenses are reclassified as production costs if, within three years of the acquisition of the building, repair and modernization measures are carried out whose net expenses exceed 15% of the acquisition costs of the building. The expenses are then not deductible immediately, but only through the depreciation of the building. In the case of a condominium, two special features must be taken into account, as pointed out by the Hessian Fiscal Court.

Tokyo, Japan / Dubai, UAE – HLS Global Co., Ltd. (“HLS Global”), a leading international accounting, taxation and business advisory firm, is pleased to announce the expansion of its global presence to the United Arab Emirates (UAE) by incorporating its subsidiary company, HLSGL Management Consultancies LLC, in Dubai (hereinafter referred as “HLS-Global UAE”). The establishment of HLS-Global UAE marks a significant milestone in the firm’s commitment to serving Japanese and multinational companies in the region with excellence.

1. Partial Income Method Can Enable Deduction of Income-Related Expenses for Capital Income Capital gains are generally subject to a flat-rate withholding tax without deduction of income-related expenses. Shareholders with a material interest can opt for the partial income method for their dividends, in which case costs are deductible. According to the Federal Fiscal Court, an initially admissible application does not lose its five-year effect if the requirements are no longer met later.

In Japan, there is currently a heated debate over the so-called JPY1.03 million barrier, and an increase in the basic deduction amount is being considered. However, in Germany, an increase in the basic deduction amount from 2025 has already been agreed upon by the government.