An overcharge for the acquisition of shares by a corporation (buyer) paid to a natural person who is associated with the buyer’s shareholder can also be subject to Gift Tax even if the difference between overcharge and fair market is already subject to Income Tax as hidden profit distribution (see also Federal Finance Court of September 2, 2015 (II B 146/14)).Context
The decision of the Dusseldorf Finance Court deals with the question if a double taxation consisting of Gift Tax and Income Tax is consistent with the general principles of the Federal Constitutional Court and the Federal Finance Court. Regarding the underlying fact pattern, no double taxation is at hand since two different taxpayers exist: the shareholder who has to tax the difference between overcharge and fair market as hidden profit distribution and his brother who has to tax the difference as gift inter vivos.