According to the European Court of Justice (January 17, 2008, C-256/06; see also Federal Court of Finance April 11, 2006, II R 35/05) the valuation of agricultural and forestry assets in states of the European Union based on the fair market value of § 31 Valuation Act in comparison to the valuation of domestic agricultural and forestry assets (§§ 140 et seqq. Valuation Act) is an infringement of the principle of the free movement of capital (Art. 73 b para. 1 EC-Treaty).
The Regional Office of Finance (Bavaria) holds the opinion that the aforementioned guidelines of the European Court of Justice are to applied analogously to the valuation of business assets, interests in commercial partnerships, shares in corporations as well as real estates. Consequently, the domestic valuation principles are also to be applied to non-domestic assets in states of the European Union.
If in practice domestic standard valuation principles (e.g. for real estates according to §§ 176 et seqq.) cannot be applied due to a lack of data (e.g. standard land value, general production costs), the fair market value has to be determined based on an appropriate estimate taking into account the individual fact pattern.
For more details regarding the valuation of domestic and foreign business assets, interests in commercial partnerships, shares in corporations as well as real estates see Koeniger, The German Inheritance and Gift Tax, 2017, p. 100 et seqq.