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we submit that the decision proceeds, in essential parts, from
assumptions which, in the light of the records, are not justified and that it
is based upon a misconception of our corporate status [Organschaft]. If the
facts of the case are properly appraised, there is no disputing the fact that
our corporation was dependent upon the I.G. Farbenindustrie Aktiengesellschaft,
Frankfurt/ Main, in financial, economic, and organizational respects, not
merely in the period from 1 January 1927 till 30 November 1938, as acknowledged
by the Reich Fiscal Administration [Reichsfinanzverwaltung] alter repeated
audits; but that this dependence also fully existed in December 1938 and that
it continues today. [Marginal handwritten note: No! It should never have been
acknowledged.] Our corporation must, therefore, now as then, be regarded as an
“Organgeselischaft” [subsidiary company] of the IG. The following
points are to be noted:
I. The facts of the case have not been
represented quite correctly in the decision, not as regards the period
anetcedent [sic] to the conclusion of our contract establishing a community of
interests [Interessengemeinschaft] with the IG and the IG's participation in
our firm, some of the facts adduced in our former statements which affect the
legal view of the issues having been disregarded. |
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II. According to Article 2 of the ordinances of 1934 pursuant to the
turnover tax law, a state of “Organschaft” exists if a legal entity
has, in effect, been financially, economically, and organizationally,
incorporated into another enterprise. According to the decision of the Reich
Finance Court 22, page 183, 36, page 39 upon which the definition of
“Organschaft” in the turnover tax law is based, a corporation
claiming recognition as a member of another enterprise, has to conform to the
following stipulations: It is precluded from acting for its own account and
risk in the management of its affairs. A relationship of personal subordination
is required in the manner that, in principle, it has to follow the instructions
of the parent company in all business matters, except for a certain limited
freedom of action which may possibly have been conceded. Thus it merely
represents a kind of business department of the parent company. These
conditions are completely complied with as regards our actual relationship
towards IG which has been set forth in some detail in our statements to date,
and the decision is wrong in disputing the existence of this state of affairs.
1. Financial dependence |
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1382 |
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