On November 19, 2015 the European Commission published the key decisions of its November infringement package. One of the key decision mentioned is the Commission’s decision to request Germany to bring its inheritance tax rules on special maintenance allowances in line with EU law.

According to a press release issued in this respect, the European Commission requested Germany to bring its inheritance tax rules on special maintenance allowances in line with EU law.

According to the European Commission, German legislation allows German tax authorities to grant a special maintenance allowance to surviving spouses or registered partners of a deceased individual only if either one or both of them are tax residents in Germany. The allowance is not available to surviving spouses or registered partners when they inherit an estate or an investment that is located in Germany but the deceased and the heir are tax resident in another Member State. The Commission considers this to be an unjustified restriction on the free movement of capital (Article 63 (1) of TFEU) as the value of the inheritance is reduced in cases where these tax residence criteria are not fulfilled. Moreover according to the European Commission, it may deter other EU nationals from investing their capital in German properties and investments.

The Commission's request takes the form of a reasoned opinion. In the absence of a satisfactory response within two months, the Commission may refer Germany to the Court of Justice of the EU.

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