Ecovis in Taiwan

Withholding tax refunds: New ruling aims to accelerate procedures for foreign companies in Germany

The Federal Fiscal Court (BFH) has ruled that foreign shareholders who are entitled to a refund of withheld capital gains tax on profit distributions are entitled to interest under EU law. This generally applies three months after the application for a refund of the excess capital gains tax is submitted. The Ecovis experts explain more.

Under German domestic regulations, if foreign companies receive dividends from German subsidiaries or license fees from domestic customers, withholding tax is due on this, which must be paid to the German tax office. In the case of dividends, the withholding tax is 25% capital gains tax + solidarity surcharge. Withholding tax of 15% is normally due on royalties and other items, such as performances by foreign artists in Germany. Withholding tax on interest, e.g. from cross-border intra-group loans, is not levied in Germany.

The withholding tax can be partly or completely reduced through the provisions of double taxation agreements or EU directives. However, corresponding applications at the German Federal Central Tax Office are subject to a strict review to prevent abuse. This can take up to 2 years, or even longer in individual cases.

Are you entitled to a refund? We can help you claim it quickly and possibly even with interest.

Armin Weber, Auditor, Tax Advisor, ECOVIS Wirtschaftstreuhand, Munich, Germany

The significance of the ruling for companies

Thanks to a new ruling by the BFH (February 25, 2025, VIII R 32/21), there is now hope of faster refunds. The court is of the opinion that the foreign applicant is entitled to interest if the refund is delayed without any indication of abuse. In these cases, the court feels that a review period of 3 months is appropriate. The ruling concerned an application by the EU Parent-Subsidiary Directive, but these principles can possibly also be applied to refunds in the context of double taxation agreements, as well as to other cross-border withholding tax situations. The same may then also apply to applications for exemption in advance. Under German regulations, the interest rate on the refund amount is currently 1.8% per year.

There is good reason to hope that the German tax authorities will take the ruling as an opportunity to reform the procedure for refunding withholding tax to foreign applicants. Further developments remain to be seen.

For further information please contact:

Armin Weber, Auditor, Tax Advisor, ECOVIS Wirtschaftstreuhand, Munich, Germany
Email: armin.weber@ecovis.com

Trademark protection China: How companies can protect their brands

Companies seeking to protect their trademarks in China can utilise various administrative and judicial methods. The Ecovis experts explain what needs to be considered.

China’s economic development has driven national demand for goods and services, prompting many foreign enterprises to register trademarks in China to distinguish the source of their goods or services and promote their brands. China has its own systems for trademark registration, use, administrative management, and judicial protection.

1. Use trademarks in accordance with registered classes and specified forms

Trademarks must be used in the approved classes of goods or services and strictly in the form stated on the trademark certificate. Otherwise, the Trademark Office may cancel the trademark in accordance with the Trademark Law of the People’s Republic of China (hereinafter referred to as the Trademark Law). This makes standardised use a prerequisite for trademark protection.

2. Ensure statutory use of trademarks

Trademarks should be used in the sense stipulated by the Trademark Law, i.e., applied to goods, packaging, containers, transaction documents, or used in advertising, exhibitions, and other commercial activities to identify the source of goods. The law stipulates that if a registered trademark is not used for three consecutive years without justifiable reason, any entity or individual may apply to the Trademark Office for its cancellation. Such cases are very common in China.

3. Avoid trademark dilution

Careless use of a trademark may lead to its “dilution” into a generic name for goods (e.g., “JEEP” has become a generic name for off-road vehicles), and the trademark may be lawfully cancelled.

4. Employ a Chinese trademark agency for legal proceedings

Foreign enterprises must apply for trademark registration or deal with trademark matters through a Chinese trademark agency. This reflects China’s judicial sovereignty and facilitates the timely receipt of official documents and notices from the Trademark Office. In opposition, cancellation, or invalidation proceedings, respondents are generally required to respond within 15 days. If the deadline is missed due to document transfer delays, the Trademark Office may reject late submissions, and the trademark owner may lose their rights.

We support you in matters relating to trademarks, patents, copyright and the fight against unfair competition.

Wu Haiyin, Senior Partner, K-Insight law firm – Member of ECOVIS International, Shanghai, China

5. Enforce rights against infringements

After obtaining registration, the trademark owner has the right to prevent others from using similar trademarks on the same goods or identical/similar trademarks on similar goods without permission. To determine trademark similarity, refer to the Trademark Trial and Examination Guidelines; for similar goods, refer to the Nice Classification. Note that these references mainly apply to Trademark Office reviews during registration.

In actual infringement cases, courts may expand the criteria for similarity, considering factors such as the trademark’s distinctiveness (including enhanced distinctiveness through use) and the practical usage scenarios of goods (e.g., whether consumers see non-classified goods such as lighters and cigarettes, or coffee and café services as related).

6. Protection for unregistered well-known trademarks

If a foreign enterprise’s trademark is well-known abroad but unregistered in China, the Trademark Law and the Anti-Unfair Competition Law of the People’s Republic of China may provide special protection in certain cases (e.g., preventing malicious registration, extending protection across goods categories, or stopping the use of the well-known trademark as a corporate name). Chinese judicial authorities tend to determine the “well-known” status on a case-by-case basis according to the trademark owner’s evidence of reputation, providing targeted protection.

7. Proactive monitoring and legal remedies

Foreign trademark owners should regularly search the Trademark Office’s website for new registration applications, file oppositions within 3 months of a potentially infringing trademark’s preliminary announcement, and initiate cancellation proceedings within 5 years of its registration. They can also monitor e-commerce platforms through keyword or image searches to identify infringing products. As Chinese courts may issue “investigation orders”, lawyers can use these to obtain evidence (e.g., illegal profit data) from platforms. Under specific conditions, trademark owners may be awarded punitive damages of 3 to 5 times the general compensation.

For further information please contact:

Wu Haiyin, Senior Partner, K-Insight law firm – Member of ECOVIS International, Shanghai, China
Email: wuhaiyin@k-insight.com

JPK_CIT: Correctly submitting accounting and tax return data

Since 1 January 2025, certain companies have been required to report detailed financial data in a standardised electronic format, the JPK_CIT. All other companies must also comply with the new reporting requirement by 2027. The Ecovis consultants know exactly what the new rules entail and when they apply to which companies.

JPK_CIT is a new reporting obligation introduced by the Ministry of Finance, which requires taxpayers to send files containing detailed financial and tax data in electronic form. Taxpayers will be required to submit two main control files as part of JPK_CIT:

• JPK_KR_PD (books of accounts and statements of turnover and balances, including data on tax revenues and expenses)
• JPK_ST_KR (information on fixed and intangible assets)

This is a further technology project (following JPK_VAT and KSeF) concerning the automation of data transfer in the form of standardised IT files directly to the Ministry of Finance. The aim of these projects is to increase the transparency and efficiency of the tax system.

The timeline for the obligation

The implementation of JPK_CIT will be gradual, depending on the size and type of taxpayer. The obligation will be introduced in three stages:

• From 2025, the new rules will cover the largest companies with annual revenues exceeding EUR 50 million (and tax capital groups, regardless of the value of the revenues achieved)
• From 2026, the obligation to report JPK_CIT will also cover companies previously obliged to send JPK_VAT files
• From 2027, all other companies subject to CIT will have to comply with the new requirements

We can assist you during implementation of JPK_CIT reporting in your entity.

Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warsaw

Deadlines for JPK_CIT reporting

Taxpayers are required to send JPK_CIT files to the competent tax authority after the end of the tax year, by the deadline for filing the annual return for the relevant tax (financial) year. Thus, if the tax (financial) year ends on 31 December 2025, these files will have to be submitted to the competent tax authority by the end of March 2026.

Challenges related to the implementation of reporting

The key substantive challenge related to the new regulation is to ensure the correctness and completeness of the data contained in JPK_CIT files. Above all, the definition of accounting tags, which will enable the unambiguous identification of accounting accounts in tax systems.

Adapting a company to the reporting of JPK_CIT files may require the implementation of modifications to IT systems and accounting programmes, which may lead to it being not so much a tax project, but an IT and accounting project.

For further information please contact:

Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warszawa
Email: hubert.kaczynski@ecovis.pl

Commercial Court NRW: New standards in international business law

On 3 April 2025, the German state of North Rhine-Westphalia launched its new Commercial Court at the Higher Regional Court in Düsseldorf, focusing on business law disputes, such as company mergers, corporate law, construction contracts and insurance claims. The reform offers strategic advantages for companies and legal advisors engaged in cross-border business with the ability to conduct proceedings entirely in English, which is a first for ordinary civil courts in Germany. The Ecovis lawyers explain the background and the advantages.

The Commercial Court is authorised to handle high-value disputes exceeding EUR 500,000 particularly in international transactions. Smaller high-value cases, starting at EUR 5,000, can also be heard in the newly established Commercial Chambers at the regional courts in Düsseldorf, Bielefeld, Essen and Cologne, which makes the system accessible not only to multinational corporations, but also to small and medium-sized enterprises.

Advantages for international business partners

Introducing English-language proceedings in German state courts lowers the barriers to entry for foreign companies and international legal advisers. Compared to private arbitration, it offers greater legal certainty and transparency, as proceedings are public and independent.

Non-German speakers benefit from reduced translation requirements and faster procedures, making this a cost-effective alternative to arbitration, particularly for long-term or complex business relationships. Judgments can be enforced across the EU and potentially beyond, thereby enhancing cross-border cooperation.

With our international expertise, we support you in drafting contracts for the representation of interests before the new commercial courts.

Eda Kaplan, Attorney at Law, ECOVIS KSO, Cologne, Germany

Public legal framework with arbitration-like flexibility

The Commercial Court combines the independence and transparency of public courts with the flexibility typically associated with arbitration. In contrast to the proceedings of arbitration tribunals, the court’s decisions are subject to public supervision and adhere to codified procedural rules. This enhances legal certainty and enforceability, providing a more robust framework for dispute resolution.

Cost-effectiveness and cross-border enforceability

Compared to international arbitration, litigation before the Commercial Court is a much more cost-effective option. Court fees are transparent and regulated and the enforceability of judgements across the EU ensures swift resolution and enforcement.

Judgments of the Commercial Court of North Rhine-Westphalia are enforceable throughout the EU and in many other countries, which simplifies the cross-border recovery of claims and increases contractual security.

For further information please contact:

Eda Kaplan, Attorney at Law, ECOVIS KSO, Cologne, Germany
Email: eda.kaplan@ecovis.com

Jens Bühner, Attorney at Law, LL.M, Certified Specialist for Commercial and Corporate Law, Partner, ECOVIS KSO, Cologne, Germany
Email: jens.buehner@ecovis.com

The ECB’s New Approach: Integrating Environmental Degradation into Monetary Policy

The European Central Bank (ECB) has recently acknowledged the direct impact of environmental degradation on inflation and economic growth. This recognition marks a significant shift in the ECB’s monetary policy, which is now fully influenced by the concept of “degradation of nature.”

Environmental degradation encompasses the entire physical environment of the Earth, including all living organisms and natural resources. The ECB’s decision to incorporate this concept into its monetary strategy is a groundbreaking advancement. For instance, 15% of the euro area’s economic output is vulnerable to water scarcity, and euro area banks have provided over €1.3 trillion in loans to sectors exposed to this risk. By considering environmental degradation, the ECB is demonstrating a commitment to addressing a broader range of factors beyond climate change.

The ECB has identified clear signs that the nature crisis poses significant risks to the economy. Failing to consider these risks may overlook relevant evidence and could affect the goal of maintaining price stability. During the particularly hot summer of 2022, food price inflation increased by between 0.4 and 0.9 percentage points. The ECB is currently studying the impacts of such extreme weather on inflation and GDP to better understand future challenges.

Unlike climate change, which can be measured using various metrics such as greenhouse gas emissions, the degradation of nature is more complex and lacks a single metric like CO2. To understand the nature crisis, it is necessary to have a comprehensive approach and consider factors such as fish stocks, timber, land, scarcity, and water quality.

In its recent review of the Monetary Policy Strategy, the ECB’s Governing Council committed to fully accounting for the implications of climate change and nature degradation within its primary and secondary mandates, in line with its Treaty obligations. The Treaty stipulates that the Eurosystem must support the European Union’s general economic policies, contributing to objectives such as balanced economic growth, a highly competitive social market economy, full employment, social progress, and a high level of environmental protection and improvement.

Conclusions

The ECB’s integration of environmental degradation into its monetary policy represents a forward-thinking approach to addressing the multifaceted challenges posed by the nature crisis. By considering a broader range of environmental factors, the ECB aims to maintain price stability while supporting the EU’s broader economic and environmental objectives. This comprehensive perspective emphasizes the need to acknowledge and address the intrinsic link between environmental health and economic stability.

Family-owned business in Spain: a hidden treasure for investors and strategic buyers

For companies seeking to establish a foothold in Spain or seeking resilient, profitable, and committed partners, family businesses offer fertile ground for long-term value creation. The Ecovis experts understand the opportunities offered by one of the most dynamic M&A markets.

The Spanish economy is driven by family businesses. According to a recent report published by the Family Business Institute (“Relevance and survival of the family business. The Family Business in Spain 2025”), 92.4% of Spanish companies are family-owned, accounting for more than 70% of private sector employment and 57% of national added value. Despite their smaller average size compared to non-family businesses, they consistently outperform them in terms of economic and financial profitability.

Why is this important for international buyers and investors?

Spanish family businesses are currently facing a generational change. Only one in three has undergone a generational transition. As a result, many business owners are beginning to consider partial or total divestment, creating ideal conditions for strategic buyers, venture capital funds or international groups looking to expand in Spain.

Are you planning to start a business in Spain or are you looking for partners? We're happy to advise you.

Juan Santodomingo Díaz, Head of Financial Advisory, ECOVIS Audit Madrid Grosclaude & Partners, Madrid, Spain

Furthermore, these companies are highly resilient: they have a higher survival rate than non-family businesses, stronger margins and a growing interest in internationalisation, especially among larger, older companies with dispersed ownership. However, many remain undercapitalised and lag behind in terms of digitalisation, making them perfect candidates for M&A deals that bring capital, innovation and access to the global market.

For further information please contact:

Juan Santodomingo Díaz, Head of Financial Advisory, ECOVIS Audit Madrid Grosclaude & Partners, Madrid, Spain
Email: juan.santodomingo@ecovis.es

VAT law China: A new era for tax compliance in China

The long-awaited VAT law, which represents a comprehensive modernisation of the Chinese tax system, will come into effect on 1 January 2026. It will align more closely with global standards such as the OECD VAT Guidelines. This will have implications for businesses.

As VAT brought in almost CNY 6.9 trillion in 2023, which is around 38% of China’s total tax revenue, these legal updates will significantly impact both local and international businesses operating in China.

Maintaining structure, enhancing clarity

The new VAT law retains the familiar three-tier tax rate structure:

• 13% for general goods and imports
• 9% for essential services such as utilities, publishing, and transportation
• 6% for modern service sectors, including IT, finance, and consulting

However, it builds upon the previous regulations by offering enhanced legal clarity and a codified statutory basis, superseding the prior provisional regulations that have governed the VAT system since 1994.

Defining taxable transactions and jurisdiction

A major change is the clearer definition of taxable transactions. Article 3 includes the sale of goods, services, intangible assets, real estate dealings, and imports within China, which are all considered taxable. This also applies to individuals and sole proprietors.

Additionally, the law adopts the place-of-consumption principle to define cross-border tax jurisdiction. Instead of the service location, the focus is now on where consumption occurs, aligning with OECD standards.

Cross-border transactions: Clearer rules

The law sets clear tests for when VAT applies to cross-border services and intangible assets, such as when the consumer is in China, the product is issued in China, or the seller is domestic. In these cases, Chinese VAT rules apply.

For overseas providers, especially in digital services, a withholding agent in China may be required. This ensures VAT compliance without forcing foreign companies to register with Chinese tax authorities.

Companies should review contracts and invoicing now to ensure compliance with the new rules before 1 January 2026.

Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China

Financial products and market-oriented pricing

Financial services are now clearly defined as taxable, using the place of issuance or the seller’s registration to determine jurisdiction. Even free financial products count as deemed sales, maintaining tax obligations.

The law also broadens the definition of sales revenue to include non-cash benefits. Market value will guide taxation for such exchanges, and authorities may reassess prices if they seem abnormally low or high.

Administrative and compliance updates

The new VAT law removes ultra-short filing periods and aligns import tax declarations with customs timelines, simplifying compliance and reducing costs for businesses.

Additionally, the removal of the “fallback clause” increases clarity by limiting authorities’ discretion to redefine taxable items, making tax rules more predictable.

Preparing for 2026 and beyond

The new VAT law is a step toward modernisation, but many details such as refund procedures and input VAT rules will be clarified in future regulations before 2026.

In the meantime, businesses engaged in cross-border trade, finance, or digital services should start reviewing how the changes may affect their operations, invoicing, and compliance.

Conclusion

China’s updated VAT law keeps the core tax rates but offers a clearer framework, greater global alignment, and more legal certainty, explain the Ecovis experts. It adopts principles such as place-of-consumption and refundable credits to support both domestic and cross-border growth.

For further information please contact:

Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China
Email: pingwen.hu@ecovis.cn

Tax reform Brazil: Alignment with International Standards

With the tax reform, the Brazilian government intends to introduce a new tax collection model. It is intended to support fiscal sustainability and alignment with global standards. The new system is scheduled to come into force in 2027. One of the most important changes is the introduction of the split payment model. The Ecovis experts explain what this means.

Brazil’s tax system is undergoing major changes set to take effect in 2026. The reforms mark a decisive step toward the modernisation of the country’s fiscal structure. Inspired by international best practices, the new system aims to foster a safer, more transparent, and more reliable business environment.

The split payment model

This mechanism involves the automatic separation of taxes – Imposto sobre Bens e Serviços (goods and services tax, IBS) and Contribuição sobre Bens e Serviços (contribution on goods and services, CBS) – at the moment of financial settlement. The amounts due are directed straight to government accounts, significantly reducing the risk of tax default and offering greater predictability in transactions, especially in B2B operations. However, it may also pose challenges to companies’ cash flow management.

By ensuring that taxes are collected in an automatic and transparent manner, split payment aims to streamline the collection system and reduce the bureaucratic burden businesses face. In practice, companies will operate in a more simplified tax environment, no longer needing to invest excessive time and financial resources in the calculation and payment of taxes, as is currently the case.

We support companies and international investors in developing legally compliant, effective strategies to adapt to the new rules.

Mauricio Nucci, Partner Tax Department, Vaz de Almeida Advogados – Member of ECOVIS International, São Paulo, Brazil

The system will be enforced starting in 2027 and will apply exclusively to electronic payments, highlighting Brazil’s commitment to digitalisation and tax efficiency. Furthermore, the new legislation includes intelligent mechanisms to prevent double taxation and allow automatic compensations, minimising distortions and enhancing operational security.

New rules for tax credits

Another highlight is the new method for generating and appropriating tax credits. From now on, the credit assessment process will be integrated into the systems of the Tax Management Committee and the Federal Revenue Service, enabling instant credit validation and automation.

This restructuring aims to position Brazil more competitively among emerging markets by creating a tax environment that is more transparent, reliable, and less bureaucratic. It opens up new opportunities for foreign companies seeking to establish or expand their operations in the country, with better control over tax risks and improved medium- and long-term financial planning.

For further information please contact:

Mauricio Nucci, Partner Tax Department, Vaz de Almeida Advogados – Member of ECOVIS International, São Paulo, Brazil
mauricio.nucci@vazdealmeida.com

Larissa Moreira, Lawyer Tax Law Department, Vaz de Almeida Advogados – Member of ECOVIS International, São Paulo, Brazil
larissa.moreira@vazdealmeida.com

Sustainability Signals: How Companies are Integrating Long-Term Value Strategies in 2025

Morgan Stanley’s latest report, entitled “Sustainable Signals: Corporates 2025,” unveils substantial trends and insights into the manner in which companies on a global scale are incorporating sustainability into their long-term strategies. The report is based on a survey conducted in March and April 2025, involving over 300 companies worldwide, both public and private, with revenues exceeding $100 million.

A salient finding is that 88% of companies regard sustainability as a potential driver of long-term value, representing an increase of three percentage points from 2024. This underscores a mounting cognisance of the strategic significance of sustainability in cultivating resilient and future-oriented enterprises.

A survey of companies reveals that the majority of them are able to measure returns on investment (ROI) for sustainability-related projects. The capacity to quantify the merits of sustainability initiatives is imperative for substantiating ongoing investment and exemplifying the substantial value these projects confer to the organisation.

The report also indicates that over half of the companies have experienced physical climate-related impacts in the past year. In response to this initiative, 80% of the companies have indicated their willingness to enhance their resilience measures. This proactive approach emphasises the significance of sustainability in mitigating the risks associated with climate change.

The perception of sustainability’s value is subject to variation across different regions and industries. A substantial increase in perceived value creation was reported by North American and European companies, with a nine-point and ten-point rise respectively from 2024. Conversely, companies in the Asia-Pacific region have adopted a more risk-based approach to sustainability.

Industries such as utilities, consumer staples, real estate, materials, and financials are more inclined to view sustainability as a value creation opportunity. Conversely, sectors such as information technology, industrials, energy, and communications services are more likely to regard sustainability as a tool for both value creation and risk management.

Sustainability as a key component of long-term strategies

The “Sustainable Signals” report, published by Morgan Stanley’s Institute for Sustainable Investing, offers a comprehensive overview of the increasing recognition among companies of sustainability as a fundamental element of their long-term strategic planning. The capacity to evaluate return on investment (ROI), the emphasis on resilience, and the regional and industry-specific insights all point to a future in which sustainability is intrinsic to corporate success.

Updated circular on the income tax treatment of crypto assets in Germany

The Federal Ministry of Finance in Germany has now provided assistance to taxpayers declaring crypto assets such as Bitcoin in their tax return to help them document and declare their income. This guidance is also available to taxpayers and tax offices outside Germany. The Ecovis experts are familiar with the details. 

In response to the ongoing developments in the crypto sector, the German Federal Ministry of Finance (BMF) has clarified the tax treatment of crypto assets. These requirements replace the previous circular dated 10 May 2022, which is published under the title “Individual questions on the income tax treatment of certain crypto assets”.

What now applies to taxpayers?

Taxpayers holding or trading in crypto assets should familiarise themselves with the new cooperation and record-keeping requirements and ensure that their documentation is tax compliant, given the cross-border nature of these assets. Key changes include:

1. Terminology: The term “crypto assets” is now used instead of “virtual currencies and other tokens” to reflect the evolution of regulatory terminology. A detailed description of the various crypto assets can be found here.

2. Transactional gains: These are taxable within one year, while long-term holding periods may offer tax advantages. Please find detailed information here.

3. Stricter documentation and tax reporting requirements:

• Investors who make large profits (more than €500,000) must keep all relevant documents archived for six years.
• Investors must keep detailed records of all transactions – such as purchases, sales, stakes, loans or airdrops. Incomplete records can lead to blanket assessments by the Inland Revenue and unexpectedly high tax bills.
  • Details of purchases and sales: Date, amount, type (purchase, exchange, mining, staking, airdrop), platform used, cost (including transaction fees and account setup) and market price source if not in EUR.
  • Use in transactions: Records of purchases/exchanges of goods & services, including credit card statements where applicable.
  • Valuation and accounting: Method chosen (FIFO, average cost, or specific identification), records of purse transactions and documentation of reallocation.
  • Other revenue sources: Mining, staking, lending, forging, airdrops, and similar activities.
  • Additional data is available upon request: Source of funds, wallet balances at key dates, wallet addresses, transaction hashes (for decentralised trades), and platform account details.

More information on stricter documentation and tax reporting requirements can be found here.

4. Staking, lending – income from capital assets: In the future, activities such as staking and lending will be classified as income from capital assets and will be subject to personal income tax.

For further information please contact:

Steffen Baierlein, Tax consultant, ECOVIS Wirtschaftstreuhand GmbH, Munich, Germany
Email: Steffen.Baierlein@ecovis.com