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Paragraph 6b of the Law on Income Tax (Einkommensteuergesetz; ‘the EStG’) provides in subparagraphs 1 to 4: ‘(1) Taxable persons who sell land, plants which grow on the land with the land attached to them, where those plants are part of an agricultural or forestry undertaking, buildings or boats intended for inland navigation, may, during the financial year in which the sale took place, deduct an amount equivalent, at most, to the capital gain realised on the sale from the acquisition or production costs of the economic assets, referred to in the second sentence, which were acquired or produced during the financial year corresponding to the sale or during the previous financial year. The deduction shall be allowed for the acquisition or production costs of 1. land, in so far as the capital gain was realised on the sale of land, 2. plants which grow on the land with the land attached to them, where the plants are part of an agricultural or forestry undertaking, in so far as the capital gain was realised on the sale of land or on the sale of plants which grow on the land with the land attached to them, 3. buildings, in so far as the capital gain was realised on the sale of land, of plants which grow on the land with the land attached to them, or of buildings, or 4. boats intended for inland navigation, in so far as the capital gain was realised on the sale of boats intended for inland navigation. The acquisition or production of buildings shall also cover their extension, expansion or renovation. In that case, the capital gain may be deducted only in respect of the costs incurred for the extension, expansion or renovation of buildings. (2) The difference, after deduction of the sale costs, between the sale price and the book value which would have been attributable to the economic asset sold at the time of the sale is considered to be a capital gain within the meaning of the first sentence of subparagraph 1. The book value is the value which is to be attributed to an economic asset under Paragraph 6. (3) If the taxpayer has not made the deduction referred to in subparagraph 1, he may, during the financial year in which the sale took place, establish a reserve reducing his taxable profit. The taxable person may, taking account of the restrictions referred to in the second to fourth sentences of subparagraph 1, deduct an amount not exceeding that reserve from the costs of the acquisition or of the production of economic assets described in the second sentence of subparagraph 1, which have been acquired or produced during the subsequent four financial years, during the financial year corresponding to their acquisition or production. The four-year period shall be extended to six years for new buildings, where their production began before the end of the fourth financial year following the establishment of the reserve. The reserve must be included in the profits up to the amount deducted. If a reserve still exists at the end of the fourth financial year following its establishment, it must be included in the profits on that date, unless a deduction of production costs for buildings the production of which commenced at that time is not possible; if the reserve still exists at the end of the sixth financial year following its creation, it must be included in the profits on that date. (4) The application of subparagraphs 1 and 3 shall be subject to the following conditions: 1. the taxable person must determine the profit under Paragraph 4(1) or Paragraph 5, 2. the economic assets sold must have constituted an integral part of the assets of a permanent establishment located within national territory for an uninterrupted period of at least six years at the time of the sale, 3. the economic assets acquired or produced must form part of the assets of a permanent establishment located within the national territory, 4. the capital gain realised on the sale must not be omitted from the calculation of the taxable profit within the national territory, and 5. the deduction under subparagraph 1 and the establishment of the reserve and its inclusion in the profits under subparagraph 3 must be capable of being traced in the accounts. The deduction under subparagraphs 1 and 3 shall not be authorised for economic assets forming part of an agricultural or forestry undertaking or used in the context of an independent activity where the capital gain results from the sale of economic assets of an industrial undertaking or business.’