In its decision of 3 June 2025, (IX R 39/21 - published on 20 No-vember 2025), the Supreme Tax Court referred the "switch-over" in Section 20 (2) Foreign Tax Act (“FTA”) to the ECJ: de-nial of DTA exemption for passive and low-taxed foreign per-manent establishments and partnerships. The core question of the referral is whether it should be possible for the taxpayer – in the context of CFC taxation under Section 7 FTA et seq. – to provide "counter-evidence" in accordance with Section 8 (2) FTA.
On September 29, 2025, the German Federal Ministry of Finance (BMF) released a draft regulation regarding the structure and exchange of the Globe Information Return (GIR) as outlined in Section 75 MinStG. The regulation aims to transpose the OECD January 2025 guidance regarding the GIR into German law by standardizing reporting procedures and introducing transition-al simplifications. It also clarifies the role of the Federal Central Tax Office (BZSt) as the competent authority and secures the automatic exchange of information.
On December 19, 2024, the European Court of Justice (CJEU) held, that it breaches the free movement of capital under Art. 63 TFEU, if WHT is refunded only to residents being in a loss-making position whereas a refund is not granted to non-residents being in a foreign loss-making position (case C-601/23, Credit Suisse Securities (Europe) Ltd. vs. Diputación Foral de Bizkaia).
This judgment confirms, on the hand, the validity of the decision in the Sofina case (C-575/17, November 22, 2018) for which it was unclear whether it established general principles of CJEU jurisprudence for the future. On the other hand, the current judgment extends the Sofina principles to cases where WHT is also withheld on dividends paid to domestic recipients.
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Furthermore, the draft act foresees that other provisions concerning international taxation are to be repealed.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 ...
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.
We have been noticing an increased number of notifications to the Federal Central Tax Office during tax audits for the failure by German subsidiaries and permanent establishments to declare and pay over German Insurance Premium tax on premiums paid by a foreign group entity to an insurer domiciled outside the EU or EEA. This can prove very costly.
Our Newsletter comments upon the recent trend of German tax authorities - particularly during wage tax audits - to consider whether a wage tax withholding obligation has arisen in cases where non-resident managing directors, board members and, in some cases, authorized signatories of German companies work for and in the interest of a German legal entity.
The Italian Tax Authorities (ITA) launched, on October 18, a public consultation on the draft interpretative Circular Letter (the ‘Draft Circular’), which, at 111 pages, covers the application of the hybrid mismatch arrangements rules (the ‘Hybrid Rules’) as governed by Legislative Decree 142/2018 (the ‘ATAD Decree’) that implements the ATAD Directives through domestic italian legislation.
The Federal Ministry of Finance has responded to the business associations ' questions regarding its circular of 11 May 2021 on the revised tax treatment of guarantee commitments. The response includes explanations to key terms used in the circular.
The circular dated 11 February 2021 covers royalty payments and capital gains in foreign-to-foreign cases where the German nexus is purely based on a registration of rights in a German public register
On April 14, 2021, after a long legislative process, the Finance Committee of the German parliament (“Bundestag”) has completed its consultation process on the law amending the Real Estate Transfer Tax Act (RETTA).
On 24 March 2021, a government draft bill aiming to implement the Anti-Tax Avoidance Directive (ATAD) passed the cabinet (in the following referred to as “Draft”) after lengthy political efforts.
On January 20, 2021, the German Government adopted the draft bill on the modernization of the relief from withholding taxes and the certification of withholding tax paid (“Abzugsteuerentlastungsmodernisierungsgesetz; AbzStEntModG).
On 20 November 2020, the Federal Ministry of Finance published a draft bill on the modernization of the relief from and the certification of withholding taxes.
On 6 November 2020, the Federal Ministry of Finance issued a circular regarding the obligation for non-resident taxpayers to submit tax returns for license income from rights registered in a domestic register. Read our Newsflash here:
