Taxation of deferred capital gains of company shares in case of transfer of residence of a natural person from a Member State to Switzerland – Martin Wächtler / Tax Office Konstanz Judgement of the European Court of Justice, 26 February 2019 (Case C581/17)

Abstract

In its ruling of 26th February 2019 (Case C-581/17) on the German taxation of company shares in the event of the transfer of residence of a natural person in the preliminary ruling procedure requested by the German Finance Court of Baden-Wuerttemberg (Finanzgericht Baden-Württemberg), the European Court of Justice (ECJ) ruled that the German regulations of the Exit Taxation in relation to Switzerland violates the Agreement of the free Movement of Persons between Switzerland and the EU. The following article will examine what exactly this ruling means and what effects and reform requirements it causes.