CJEU - Recent Developments in Direct Taxation 2020

S. 1341. Facts and legal Background

J&S Service UG, a German corporation, had to file for insolvency. An insolvency administrator was appointed. The insolvency administrator requested information from the tax administration in relation to the tax situation of J&S Service UG. He wanted to examine the possibility of bringing insolvency avoidance claims against the tax administration. In particular, he wanted to know the amount of taxes paid by J&S Service UG, when these taxes were paid and when the tax administration knew that J&S was in financial difficulties. According to German insolvency law, creditors are only entitled to a quota of their claims if the assets of the insolvent company are not sufficient to satisfy all creditors. Once an insolvency proceeding has started, the individual execution of the claims is no longer permissible. Payments by the debtor to creditors can be challenged and have to be paid back if the payments were made up to three months before the insolvency proceedings started, the debtor was already in financial difficulties and the creditor knew of these difficulties. In German insolvency proceedings, the government does not enjoy priority in relation to other cre...