On 5 December 2024, the Federal Ministry of Finance published a second draft of the German Pillar 2 Tax Amendment Act (hereinafter referred to as “the draft act”) for feedback by 31 January 2025 as part of the consultation process. In addition to the aspects already included in the first draft [Newsflash, March 21, 2023], this second draft includes further amendments – inter alia – by implementing the OECD Administrative Guidance from June 2024.
Furthermore, the draft act foresees that other provisions concerning international taxation are to be repealed. These include inter alia the license barrier rule under Sec. 4j of the German Income Tax Act, a rule foreseeing the non-deduction of so-called special business expenses according to Sec. 4i German Income Tax Act and the CFC taxation rule ...
On Wednesday, 16 August 2023, the Federal Cabinet adopted the government's draft bill on the implementation of Council Directive (EU) 2022/2523 to ensure minimum global taxation with other accompanying measures. The draft was officially published on 17 August 2023
On Monday, 10 July 2023, the Federal Ministry of Finance sent the draft bill for the implementation of the Directive to ensure a global minimum level of taxation for multinational enterprise groups and large domestic groups in the Union (so-called Minimum Taxation Directive Implementation Act – “Implementation Bill”) to the associations with the request for comment by 21 July 2023.
The Federal Ministry of Finance (MoF) published a draft law on March 20, to implement the ‘Pillar Two’ Directive ensuring a global minimum taxation for multinational groups and large domestic groups in the European Union (so-called Minimum Tax Directive Implementation Act - MinBestRL-UmsG). The publication of the German draft law follows the formal adoption by the EU Council to adopt Pillar Two on December 15, 2022.
At an informal meeting in Prague, the finance ministers of France, Spain, Italy, the Netherlands and Germany published a joint statement on global effective minimum taxation ("Pillar 2").
Following the agreement reached in October 2021 by over 135 members of the OECD/G20 Inclusive Framework on BEPS to a two-pillar solution to address the tax challenges arising from digitalization and globalization of the economy, work on the implementation of the two-pillar plan is well under way.
A major reform of the international tax system finalized on 8 October 2021 at the OECD will ensure that Multinational Enterprises (MNEs) will be subject to a minimum 15% tax rate from 2023. The landmark deal will also reallocate more than USD 125 billion of profits from around 100 of the world’s largest and most profitable MNEs to countries worldwide, ensuring that these firms pay a fair share of tax wherever they operate and generate profits.
On 1 July 2021, the OECD reached broad agreement on key points for a fair taxation: 130 countries and jurisdictions have joined a new two-pillar plan to reform international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate.
