Tax & Legal

The Supreme Tax Court has held the “minimum taxation” deferral of loss relief to be constitutionally acceptable.

The Supreme Tax Court has held that the 1999 introduction of “minimum taxation” rules limiting loss offset by income type do not apply to a 1999 loss carried back to 1998.

According to various statements of the German Finance Minister Olaf Scholz on 22 May 2019, a system of international minimum taxation will be discussed at the forthcoming G20 (June 2019) and G7 (August 2019) meetings. The aim is to agree such a system (within the terms of the Global Anti-Base Erosion "GloBE" agenda and given the name “BEPS 2.0”) with the other 128 states of the OECD in the Summer of 2020.

On 22 December 2021, the European Commission proposed a draft directive to ensure effective minimum taxation of the worldwide activities of multinational corporations.

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.

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

The Supreme Tax Court has held that a tax office cannot be required to issue a provisional assessment restricting the immediate deduction of the loss brought forward, merely because of the possibility that the remaining loss to be carried forward might be invalidated by a share transaction abroad at some future point in time.

The Supreme Tax Court has held that the 1999-2003 “minimum taxation” rules apply to “paper” losses, but not to those borne with true economic effect.

On 10 November 2023, the Bundestag passed the draft bill submitted by the German government on the EU directive on global minimum taxation. The vote was based on a recommendation by the Finance Committee.

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").

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.

The Supreme Court has held that the initial full loss offset on €1 m applies to each period of assessment, rather than to each calendar year. Thus it can only be claimed once for a multi-year assessment.

The Supreme Tax Court has referred to the Constitutional Court on whether a confiscatory effect of the loss offset deferral provisions can be a breach of the equal treatment requirement of the constitution.

On 14 April 2025 the Council adopted a directive (DAC9) that will extend cooperation and information exchange in the area of minimum effective corporate taxation.

In this issue: PwC Reports, Official Pronouncements, Supreme Tax Court Cases, From Europe and From PwC

In this issue: PwC Reports, Official Pronouncments, Supreme Tax Court Cases, From Europe and From PwC

At its closed-door meeting in Meseberg on 30.8.2023, the Federal Cabinet adopted the government draft for a law to enhance growth opportunities, investment, and innovation as well as tax simplification and tax fairness (Growth Opportunities Act).

The Supreme Tax Court has confirmed that a minimum tax rate levied on non-residents earning business income in Germany does not offend against the non-discrimination clauses of international treaties.

On November 24, the SPD, the Greens and FDP concluded their coalition talks. The party membership of the three parties have yet to approve the Coalition Agreement. Members of the Green party can vote on the Coalition Agreement and the proposals for personnel in the ten days following 24 November 2021.

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.