| Status | Enacted Law |
| Law | On September 29, 2025, the Federal Ministry of Finance opened a consultation on a draft regulation for the implementation of the Minimum Tax Act. This provides for compliance rules for the exchange of the GIR and simplified reporting. A draft bill including the amendments from both Discussion Drafts (as well as additional amendments for the January 2025 OECD Administrative Guidance and the EU DAC 9 amendments) was issued on August 6, 2025. On April 3, 2025, the German Tax Authority issued a letter on the treatment of fiscally transparent partnerships (such as domestic or foreign partnerships that are not subject to corporate income tax) for CbCR purposes and for the purposes of the Pillar 2 Transitional CbCR Safe Harbour. On December 6, 2024, the Federal Ministry of Finance issued a Second Discussion Draft on amendments to the Minimum Tax Act. The updated Second Discussion Draft includes amendments for the June 2024 OECD Administrative Guidance. On October 17, 2024, Germany released the template for its Group Parent Notification Form (updated on March 11, 2025). On December 27, 2023, Germany’s law to implement the Pillar 2 GloBE Rules/EU Minimum Tax Directive was published in the Federal Law Gazette 2023. On December 15, 2023, the Bundesrat (Germany’s Upper House of parliament) passed the Global Minimum Tax Act. It requires Presidential approval for enactment. On November 10, 2023, the Bundestag (Lower House) approved the German draft law to implement the EU Minimum Tax Directive. On August 16, 2023, the Federal Cabinet adopted the government draft for the implementation of the Pillar Two GloBE Rules. On 10 July 2023, the German Ministry of Finance published an updated version of the official draft legislation on the domestic implementation of the GloBE rules. On March 20, 2023, the German Federal Ministry of Finance published a consultation, including a draft law to implement the EU Global Minimum Tax Directive. On May 17, 2024, the Germany Finance Ministry issued a draft Global Minimum Tax Return to specialist publishers, software providers and associations for feedback. On August 20, 2024, the German Ministry of Finance issued a Discussion Draft of a Draft Law to implement most aspects of the Third Set of OECD Administrative Guidance. On November 22, 2024, the Annual Tax Act was passed by the Upper House of Parliament. This includes two technical changes to the German GMT law. |
| Effective Date | January 1, 2024. |
| IIR | Yes (2024) |
| UTPR | Yes (2025) |
| QDMTT | Yes (2024) |
| Filing Deadlines | Standard |
| Safe Harbours | CbCR Safe Harbour, Simplified Calculation Safe Harbour, Transitional UTPR Safe Harbour & the QDMTT Safe Harbour |
On September 29, 2025, the Federal Ministry of Finance opened a consultation on a draft regulation for the implementation of the Minimum Tax Act. This provides for compliance rules for the exchange of the GIR and simplified reporting.
On August 6, 2025, Germany issued the draft bill to amend the Minimum Tax Act. This follows the two previous discussion drafts and now includes the January 2025 OECD Administrative Guidance and DAC9 amendments.
On August 5, 2025, Germany’s Ministry of Finance issued a letter providing for the XML for the GIR including instructions on how to file electronically.
On April 3, 2025, the German Tax Authority issued a letter on the treatment of fiscally transparent partnerships (such as domestic or foreign partnerships that are not subject to corporate income tax) for CbCR purposes and for the purposes of the Pillar 2 Transitional CbCR Safe Harbour.
On December 6, 2024, the Federal Ministry of Finance issued a Second Discussion Draft on amendments to the Minimum Tax Act.
The updated Second Discussion Draft includes amendments for the June 2024 OECD Administrative Guidance.
On November 22, 2024, the Annual Tax Act was passed by the Upper House of Parliament. This includes two technical changes to the German GMT law.
On October 17, 2024, Germany released the template for its Group Leader Notification Form (updated on March 11, 2025).
On August 20, 2024, the German Ministry of Finance issued a Discussion Draft of a Draft Law to implement most aspects of the Third Set of OECD Administrative Guidance.
On June 5, 2024, the German Federal Ministry of Finance published the government draft for an Annual Tax Act 2024. This includes an amendment to the minimum tax act to implement the provision relating to the calculation of the SBIE for mobile employees in the Second Set of OECD Administrative Guidance.
On May 17, 2024, the Germany Finance Ministry issued a draft Global Minimum Tax Return to specialist publishers, software providers and associations for feedback.
On December 27, 2023, Germany’s law to implement the Pillar 2 GloBE Rules/EU Minimum Tax Directive was published in the Federal Law Gazette 2023.
The Bundesrat (Germany’s Upper House of parliament) passed the ‘Act on the implementation of Council Directive (EU) 2022/2523 to ensure a global minimum level of taxation and further accompanying measures’ . It requires Presidential approval for enactment.
On November 10, 2023, the Bundestag (lower house) approved the German draft law to implement the EU Minimum Tax Directive.
On August 16, 2023, the Federal Cabinet adopted the government draft for the implementation of the Pillar Two GloBE Rules.
On July 10, 2023, the German Ministry of Finance issued an updated draft law for the implementation of the EU Global Minimum Tax Directive.
On March 20, 2023, the German Federal Ministry of Finance published a consultation, including a draft law (the Minimum Taxation Directive Implementation Act), to implement the EU Global Minimum Tax Directive.
GLOBE APPLICATION
General
The legislation is very comprehensive and, as expected, covers all relevant aspects of the EU Global Minimum Tax Directive.
In particular, it provides for an Income Inclusion Rule (IIR) for financial years beginning after December 30, 2023 and the Under-Taxed Payments Rule (UTPR) for financial years beginning after December 30, 2024.
The legislation also includes a Qualifying Domestic Minimum Top-Up Tax (for financial years beginning after December 30, 2023) which reflects the OECD Administrative Guidance.
In addition, safe harbours, as reflected in the OECD Safe Harbour Guidance and the Second Set of OECD Administrative Guidance are also reflected in the draft legislation.
The law includes a mandatory exemption from accounting for deferred taxes that arise from the Minimum Tax Act or corresponding foreign tax laws (based on international accounting standards). This is based on the exemption in international accounting standards (IAS 12.4A).
In addition to the accounting exemption, a new disclosure requirement applies in the notes to the financial accounts. The actual tax expense arising under the Minimum Tax Act or foreign minimum tax laws must be disclosed, alongside the qualitative effects (and quantitative if available) of the GloBE rules on the corporation.
An amendment to Section 50 of the Minimum Tax Act in the 2025 Draft Law includes an amendment to the treatment of deferred tax liabilities that have been offset against deferred tax assets under Section 274 of the German Commercial Code. This permits the recasting of the losses to minimum tax rate under Section 50(3) of the Minimum Tax Act.
Administrative Guidance
The law issued in August 2023 included relevant provisions from the OECD Administrative Guidance (eg Blended CFC Regimes, Substitute Loss Carry Forwards etc).
The final enacted law takes this a step further and includes additional aspects of the OECD Administrative Guidance, particularly the July 2023 Administrative Guidance.
Aspects of the First Set of OECD Administrative Guidance included in the law are:
-The deemed consolidation rules (Article 1.2)
-Provisions for consolidated deferred tax amounts (Article 1.3)
-The exclusion of sovereign wealth funds from the definition of Ultimate Parent Entity (Article 1.4)
-The meaning of “ancillary” for Non-Profit Organisations (Article 1.6)
-The foreign exchange hedge election (Article 2.2)
-The rules for the asymmetric treatment of dividends and distributions (Article 2.3)
-The debt release election (Article 2.4)
-Provisions for accrued pension expenses (Article 2.5)
-Excess negative tax carry-forward guidance (Article 2.7)
-Substitute loss carry forwards (Article 2.8)
-The equity gain or loss inclusion election (Article 2.9)
-Rules for blended CFC Tax Regimes (Article 2.10)
-The extension of the taxable distribution method election to insurance investment entities (Article 3.1)
-The exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity (Article 3.2)
-Provisions on restricted tier one capital for insurance companies (Article 3.3)
-Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders (Article 3.4)
-The portfolio shareholding election (Article 3.5)
-The application of the tax transparency election to mutual insurance companies (Article 3.6)
-Deferred tax assets and tax credits under the transitional rules (Article 4.1)
-The transitional rules and transactions similar to asset transfers (Article 4.2)
-Asset carrying value and deferred taxes under the transitional rules (Article 4.3)
The following provisions of the Second Set of OECD Administrative Guidance (published on July 17, 2023), are included in the law:
-Currency Provisions
-QDMTT Safe Harbour
-Transitional UTPR Safe Harbour
-Marketable Transferable Tax Credits
-Treatment of Investments in Certain Tax Transparent Entities
-Interjurisdictional Assets for the Substance-based Income Exclusion (the provisions for interjurisdictional payroll costs are included in the 2024 Annual Tax Act)
-Substance-based Income Exclusion: Other Assets
-QDMTT Challenges
However, the 2025 Draft Law proposes to implement most aspects of the Third Set of OECD Administrative Guidance, including amendments to the Transitional CbCR Safe Harbour (see below) and Blended CFC Regimes.
The 2025 Draft Law also includes proposed amendments to implement the Fourth Set of OECD Administrative Guidance. This includes:
-Aggregate DTL Category basis (Article 1.2.1)
-Exclusion of certain types of GL accounts and separate tracking (Article 1.2.1)
-Exclusion of GL accounts that generate standalone DTAs (Article 1.2.1)
-Exclusion of swinging accounts and separate tracking (Article 1.2.1)
-FIFO/LIFO Basis (Article 1.2.2)
-Aggregation of Short-term DTLs (Article 1.2.3)
-Reversal of DTLs that accrued before the Transition Year (Article 1.2.2)
-5 year unclaimed accrual election (Article 1.2.2)
-Recalculated deferred tax where GloBE carrying value differs from accounting carrying value (Article 2.1.2)
-Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and rev hybrids (Article 4.1)
-Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules (Article 4.2.3)
-Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity (Article 5.2.2)
-Non-group owners: Partially owned Flow-through Entities (Article 5.3.2)
-Non-group owners: Indirect minority ownership (Article 5.3.5)
-Taxes allocated to a flow-through entity (Article 5.4.2)
-Hybrid entities – Taxes pushed down include indirect owners (Article 5.5.2)
-Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system (Article 5.5.4)
-Extension of taxes pushed down to include Reverse Hybrids (Article 5.6.2)
Amended Section 82/82a in the draft law includes the deferred tax recognition amendments to Article 9.1 of the GloBE Rules in the January 2025 OECD Administrative Guidance (including the grace period for DTA reversals). The consequential amendments to the Transitional CbCR Harbour (Section 87) and the QDMTT Safe Harbour (Section 81) are also included.
Safe Harbour and Penalty Relief Guidance
Safe harbours, as reflected in the OECD Safe Harbour Guidance are reflected in the legislation.
The legislation includes the simplifications agreed by the OECD. In particular:
• The Transitional CbCR Safe Harbour (Sections 84 to 88);
• Simplified Calculation Safe Harbour (Section 79), including Non-Material Constituent Entities (Section 80)
• The Transitional UTPR Safe Harbour (Section 89)
Section 81 of the law implements the QDMTT Safe Harbour in Section 5.1 of the July 2023 Administrative Guidance.
The QDMTT Safe Harbour excludes the application of the GloBE Rules in other jurisdictions by deeming the Top-up Tax payable under the GloBE Rules to be nil where top-up tax is levied under a QDMTT. The MNE Group therefore only needs to undertake one calculation.
However, this then opens up a risk that the QDMTT tax may be much less than any GloBE top-up tax that would have been due. This would undermine the international application of the GloBE rules. Therefore, to qualify for the QDMTT Safe Harbour a QDMTT must meet three conditions as provided in the OECD Administrative Guidance (QDMTT Accounting Standard, Consistency Standard and the Administration Standard).
The 2025 Draft Law proposes to implement most of the amendments to the Transitional CbCR Safe Harbour included in the Third Set of OECD Administrative Guidance (December 2023), including:
-Purchase Accounting Adjustments (consistent reporting condition and the goodwill impairment adjustment)
-JVs
-Same Financial Statements/Local Financial Statements for Statutory Reporting
-Using different accounting standards
-Adjustments to Qualified Financial Statements/Dividend Misatches
-MNEs not required to file CbC Reports
-Qualified Financial Statements for PEs
-Treatment of hybrid arbitrage arrangements
The BMF letter contains explanations of the following partnership structures with regard to the Pillar 2 CbCR Safe Harbour (assuming the partnership is tax transparent in Germany and is treated as such by the Group partner entity):
Domestic partnership (with asset management activity)
The partnership is treated as a stateless entity for Pillar 2 purposes and is therefore excluded from the CbCR safe harbour. The GloBE income is reduced by any amounts attributable to non-group partners and then allocated to the group partner.
The group partner can then apply the CbCR safe harbour (assuming it meets the requirements).
Domestic Partnerships (with commercial income and a domestic PE) and a German resident partner
The partnership is treated as a stateless entity for Pillar 2 purposes and is therefore excluded from the CbCR safe harbour. The domestic PE does not constitute a PE for Pillar 2 purposes.
The GloBE income is reduced by any amounts attributable to non-group partners and then allocated to the group partner. The group partner can then apply the CbCR safe harbour (assuming it meets the requirements).
The information reported in the CbCR report of the domestic permanent establishment is taken into account for the profit or loss before taxes for CbCR Safe Harbour purposes for the Group Partner. If this is not done, the group shareholder is excluded from the CbCR safe harbour.
Domestic Partnerships (with commercial income and a domestic PE) and foreign-based Partner
The partnership is treated as a stateless entity for Pillar 2 purposes and is therefore excluded from the CbCR safe harbour. The domestic PE constitutes a PE for Pillar 2 purposes.
The GloBE income is reduced by any amounts attributable to non-group partners and then allocated to the foreign group partner. The group partner can then apply the CbCR safe harbour (assuming it meets the requirements).
For the purposes of the CbCR Safe Harbour for the PE in Germany, the standard CbCR Safe Harbour rules for PEs applies. Therefore the profit or loss before tax corresponds to the annual profit before tax of the domestic PE reported in the CbCR. Simplified covered taxes are the taxes in the PEs accounts under the Pillar 2 rules.
Foreign Partnerships and foreign-based Partner (no domestic PE)
The partnership is treated as a stateless entity for Pillar 2 purposes and is therefore excluded from the CbCR safe harbour.
The GloBE income is reduced by any amounts attributable to non-group partners and then allocated to the foreign group partner. The group partner can then apply the CbCR safe harbour (assuming it meets the requirements).
The application of the global minimum tax follows the EU Minimum Tax Directive (eg it also applies to wholly domestic groups and requires a constituent entity applying the IIR to apply it not only to foreign subsidiaries but also to all constituent entities resident in that Member State (which isn’t mandatory in the Model Rules)).
Taxable Period
Section 94 of the law provides that the taxable period is the calendar year. As such, even if the fiscal year differs from the calendar year, the minimum tax only arises at the end of December 31 of the year in which the financial year ends.
This simplifies the calculation and monitoring of deadlines.
Allocation of Global Minimum Tax Liabilities
Section 3 of the law includes a provision that applies to German Minimum Tax Groups. In particular, the registration and payment of the top-up tax for entities within the group is made by the group parent.
The group parent is the UPE if it is located in Germany. If not, a parent company located in Germany is the group parent if it the parent company of all subsidiaries in Germany. If this doesn’t apply then a foreign UPE must nominate which entity is the group parent. The aim is to simplify the administration.
Section 3(6) of the law includes a provision that requires the group entities to compensate the group parent for the tax incurred on their behalf. Similarly tax refunds must be passed on by the group parent to the other German business units.
Elections
All of the elections included in the OECD Model Rules and the EU Minimum Tax Directive are provided in the draft law, including:
-Excluded Entity Election (Section 5(3) of the law)
-Stock-Based Compensation Election (Section 34 of the law)
-Election to use the Realization Method (Section 35 of the law)
-Election to Spread Capital Gains (Section 36 of the law)
-Consolidation Election (Section 37 of the law)
-Unclaimed Accrual Election (Section 50(7) of the law)
-GloBE Loss Election (Section 51 of the law)
-Prior Year Adjustment Election (Section 52(4) of the law)
-De minimis Election (Section 56 of the law)
-Substance-Based Income Exclusion Election (Section 58 of the law)
-Deemed Disposal of Assets Election (Section 66(4) of the law)
-Taxable distribution Election (Section 74(1) of the law)
-Tax transparency Election (Section 73(1) of the law)
-Distribution Tax Regime Election (Section 71(1) of the law)
-Safe Harbour Elections (Section 87 of the law)
The other elections included in the OECD Administrative Guidance are included in the updated draft law. This includes the:
–Debt Release Election (Section 41 of the law);
–Foreign Exchange Hedge Election (Section 40 of the law);
–Portfolio Shareholding Election (Section 38 of the law) ;
–Excess Negative Tax Carry-Forward Election (Section 46 of the law); and the
–Equity Investment Inclusion Election (Section 39 of the law).
Qualifying Domestic Minimum Top-Up Tax (QDMTT)
Sections 90-93 of the legislation provide for a QDMTT (or at least a domestic minimum tax that is likely to be classed as a QDMTT).
Section 90(1) of the legislation provides that the method of calculation is to take the general top-up tax calculation in Section 55(3) or additional top-up tax from a prior year (in Section 57). However, this is then effectively recalculated taking account of some adjustments that were provides in the OECD Administrative Guidance:
Section 90(2) of the legislation provides that the Top-up Tax that is subject to the QDMTT is based on the whole amount of the Jurisdictional Top-up Tax irrespective of the Ownership Interests held in the Constituent Entities located in the QDMTT jurisdiction by any Parent Entity of the MNE Group (unlike the general GloBE Rules).
Stateless entities, joint ventures and joint venture subsidiaries are to be allocated to the tax jurisdiction in which they were incorporated (ie a stateless entity is no longer stateless) under Section 91. This means that these entities that are incorporated in Germany will be subject to the QDMTT.
As provided in the OECD Administrative Guidance, CFC taxes are not pushed down when considering the QDMTT ETR under Section 92of the draft legislation (See Treatment of CFC Taxes: QDMTTs vs GloBE Rules) Section 92 prohibits the pushdown of taxes for PEs, CFC’s, Hybrid entities, and also for taxes on distributions. This ties in with the Second Set of OECD Administrative Guidance. Note that domestic withholding tax on dividends distributed from a German entity to a foreign entity should still be allocated to the German entity under the OECD Guidance for the drafting of QDMTTs. Section 92 of the law provides for this by stating that only recorded foreign taxes are not pushed down.
The German QDMTT applies the general GloBE rules to determine the accounting standard used. As such, the domestic minimum tax is calculated using the financial accounting standard of the UPE, and, if that is not practicable, on the basis of an accepted accounting standard or an approved accounting standard, if:
-the constituent entity’s financial statements are prepared in accordance with that standard,
-the information contained in the financial statements is reliable; and
-permanent differences of more than EUR 1 million are conformed with the UPEs accounting standard.
Registration
Section 3(1) of the German GMT Law provides that German resident constituent entities of corporate groups form a Minimum Tax Group. The Group Parent is liable to file and account for top-up tax under the IIR, UTPR and DMTT on behalf of the Minimum Tax Group.
Section 3(3) of the GMT Law provides that the UPE is the Group Parent if it is located in Germany. If this does not apply the German parent entity of the German resident constituent entities is the Group Parent. In all other cases, a designated German Constituent Entity is treated as the Group Parent. If not, the economically most relevant German resident constituent entity is deemed to be the Group Parent.
These tests apply based on the circumstances at the end of the tax period.
Section 3(4) stated that the Group Parent is required to electronically notify the Federal Central Tax Office of its status as a Group Parent within two months after the end of the tax period (ie February 28, 2025 for the 2024 fiscal year).
Changes to the status of the Group Parent, must be notified immediately by the previous Group Parent.
As the Group Parent pays top-up tax on behalf of the minimum tax group, members of the members of the minimum tax group whose top-up tax is attributed to the Group Parent obliged to compensate the Group Parent for their share of the top-up tax.
On October 17, 2024, Germany released the template for its Group Parent Notification Form:
The 2024 Annual Tax Act (passed by the Upper House of Parliament on November 22, 2024) provides that a single constituent entity in Germany will be classed as group parent for the purposes of the German minimum tax group provisions.
Filing
Section 75(3) of the law provides that a GloBE Information Return is required to be filed 15 months after the end of the fiscal year, with the tax return due at the same time (18-months for the first fiscal year). For the filing of the tax return, the provisions of the general tax code apply.
Section 76 of the law provides that the GloBE Information Return must include:
-A list of all group entities, broken down by tax jurisdiction, their tax numbers and their status for GloBE purposes;
-An overview of the corporate structure of the group, in particular the controlling interests group entities that are held by other entities;
-The ETR and top-up tax for each relevant jurisdiction including both under the IIR and UTPR
-A list of all GloBE elections claimed.
GloBE top-up tax is required to be self-assessed and is payable within, one month after the tax return is filed under Section 90 of the draft legislation.
Section 75(1) of the law provides that a Constituent Entity located in Germany is required to file a GloBE Information Return. The return may be filed by either the Constituent Entity or by a Designated Entity on its behalf.
Under Section 75(2) of the law, a Constituent Entity is not required to file a GloBE Information Return with the German tax administration if a GloBE Information Return has been filed by either the Ultimate Parent Entity or the Designated Filing Entity located in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with Germany for the Reporting Fiscal Year.
Section 96(1) of the law also requires a German constituent entity to submit a tax return electronically by the standard filing deadline. When there are a number of Constituent Entities within an MNE group, only the parent company is required to file.
Section 96 of the law ensures that the deadline for submitting the tax return does not end before the deadline for submitting the GloBE Information Return. The 2024 Draft Law provides that the earliest date for the submission of the GIR is June 30, 2026.
Section 98 of the law provides that it is an administrative offence to intentionally or recklessly, fail to submit the GloBE Information Return (in whole or part), by the filing deadline.
Section 98(2) of the law provides that a taxpayer that is intentionally or recklessly late in submitting a GloBE information return can be subject to a penalty of up to EUR 30,000.
On August 5, 2025, Germany’s Ministry of Finance issued a letter providing for the XML for the GIR including instructions on how to file electronically.
On October 17, 2024, Germany released the template for its Group Leader Notification Form.
It has been possible to submit the group parent report electronically via the online portal of the Federal Central Tax Office (BZSt) since January 2, 2025.
| Germany | |||
|---|---|---|---|
| Effective Date: | Accounting Periods beginning after December 30, 2023 | ||
| Section/Article | |||
| First Set of OECD Administrative Guidance | |||
| 1.1 | Rebasing monetary thresholds in the GloBE Rules | 97 | |
| 1.2 | Deemed consolidation test | 4(6) -Excludes State Entities |
|
| 1.3 | Consolidated deferred tax amounts | 15 |
|
| 1.4 | Sovereign wealth funds and the definition of Ultimate Parent Entity | 4(3) |
|
| 1.5 | Clarifying the definition of ‘Excluded Entity’ | – | |
| 1.6 | Meaning of ancillary for Non-Profit Organisations | 5(2) |
|
| 2.1 | Intra-group transactions accounted at cost | – | |
| 2.2 | Excluded Equity Gains or Loss and hedges of investments in foreign operations | 38 |
|
| 2.3 | Excluded Dividends- Asymmetric treatment of dividends and distributions | 17(2) |
|
| 2.4 | Debt release Election | 39 |
|
| 2.5 | Accrued Pension Expenses | 25 | |
| 2.6 | Covered Taxes on deemed distributions | – | |
| 2.7 | Excess Negative Tax Carry-forward guidance | 44 | |
| 2.8 | Substitute Loss carry forwards | 48 | |
| 2.9 | Equity Gain or loss inclusion election | 37 | |
| 2.9 | Qualified Ownership Interest/Flow through entity | 29 | |
| 2.1 | Allocation of taxes arising under a Blended CFC Tax Regimes | 85 | |
| 3.1 | Application of Taxable Distribution Method Election to Insurance Investment Entities | 7 | |
| 3.2 | Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity | 4 | |
| 3.3 | Restricted Tier 1 Capital | 29 | |
| 3.4 | Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders | 31 | |
| 3.5 | Simplification for Short-term Portfolio Shareholdings | 36 | |
| 3.6 | Application of Tax transparency election to Mutual insurance companies | 71 | |
| 4.1 | Deferred tax assets with respect to tax credits under Article 9.1.1 | 79 | |
| 4.2 | Applicability of Article 9.1.3 to transactions similar to asset transfers | 79 | |
| 4.3 | Asset carrying value and deferred taxes under 9.1.3 | 79 | |
| Second Set of OECD Administrative Guidance | |||
| 1 | Currency conversion rules | 97 | |
| 2 | MTTCs | 27/28/29 | |
| 3 | SBIE Rules | – | |
| – Foreign rules | 59/60 (for assets. The rules for payroll costs are included in the 2024 Annual Tax Act) | ||
| Stock-based compensation election | – | ||
| Leases | 60 | ||
| – Impairment losses inc in tangible asset value | 60 | ||
| 4.1 | QDMTT Safe Harbour | 81 | |
| 4.2 | UTPR Safe Harbour | 89 | |
| Third Set of OECD Administrative Guidance | |||
| 1 | Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) | draft law 87a | |
| 2.2.1 | Transitional CbCR – JVs | draft law 85 | |
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | draft law 87 | |
| 2.3.2 | Transitional CbCR – Using different accounting standards | draft law 87 | |
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | draft law 87 | |
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | draft law 84 | |
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | draft law 87 | |
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | ||
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | draft law 87b | |
| 3.1 | Identifying Consolidated Revenue | ||
| 3.2 | Mismatch between Fiscal Years of the UPE and another Constituent Entity | ||
| 3.3 | Mismatch between Fiscal Year and Tax Year of Constituent Entity | ||
| 4.2.1 | Blended CFCs -multiple GloBE Jurisdictional ETRs | draft law 88 | |
| 4.2.2 | Blended CFCs – not required to calculate an ETR | draft law 88 | |
| 4.2.3 | Blended CFCs – income of non-GloBE Entities | draft law 88 | |
| 5.3 | 30 June 2026 Filing deadline | draft law 75 | |
| 6 | NMCE Simplified Calcs | ||
| Fourth Set of OECD Administrative Guidance | |||
| 1.2.1 | Aggregate DTL Category basis | draft law 50a | |
| 1.2.1 | Exclusion of certain types of GL accounts and separate tracking | draft law 50a | |
| 1.2.1 | Exclusion of GL accounts that generate standalone DTAs | draft law 50a | |
| 1.2.1 | Exclusion of swinging accounts and separate tracking | draft law 50a | |
| 1.2.2 | FIFO/LIFO Basis | draft law 50a | |
| 1.2.3 | Aggregation of Short-term DTLs | draft law 50a | |
| 1.2.2 | Reversal of DTLs that accrued before the Transition Year | draft law 50a | |
| 1.2.2 | 5 year unclaimed accrual election | draft law 50 | |
| 2.1.2 | Recalculated deferred tax where GloBE carrying value differs from accounting carrying value | draft law 50 | |
| 2.1.2 | GloBE and accounting carrying values and the Transition Rules | draft law 64 | |
| 2.1.2 | Additional provisions for Intragroup transactions accounted for at cost | ||
| 2.1.2 | Exclusion of GloBE carrying value from SBIE | ||
| 3.1.3 | General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps | ||
| 3.1.3 | Specific rules for foreign PEs/CFCs, Hybrids/rev hybrids with domestic source income | ||
| 3.1.3 | Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries | ||
| 4.1 | Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and rev hybrids | draft law 50 | |
| 4.2 | Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process | ||
| 4.2.2 | Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids | ||
| 4.2.3 | Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules | draft law 50 | |
| 5.2.2 | Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity | draft law 7(32) | |
| 5.3.2 | Non-group owners: Partially owned Flow-through Entities | draft law 7(32) | |
| 5.3.5 | Non-group owners: Indirect minority ownership | draft law 7(32) | |
| 5.4.2 | Taxes allocated to a flow-through entity | draft law 49 | |
| 5.5.2 | Hybrid entities – Taxes pushed down include indirect owners | draft law 7(32) | |
| 5.5.4 | Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system | draft law 7(32) | |
| 5.6.2 | Extension of taxes pushed down to include Reverse Hybrids | draft law 49 | |
| 6.1.4 | Option to exclude a Securitization Entity from scope of QDMTT | ||
| 6.1.4 | Option to not impose top-up tax liabilities on SPVs used in securitization transactions | ||
| 6.1.4 | Amendments to the Switch-Off rule | ||
| 6.1.4 | New definition: Securitization Entity | ||
| 6.1.4 | New definition: Securitization Arrangement | ||
| January 2025 OECD Administrtive Guidance | |||
| 1 | Articles 8.1.4 and 8.1.5 | ||
| 1 | Amendments to CbCR Safe Harbour for 9.1 | draft law 87 | |
| 1 | Amendments to QDMTT Safe Harbour for 9.1 | draft law 81 | |
| 1 | Article 9.1 of the GloBE Rules | draft law 82/82a | |
| 1 | Central Record of Legislation with Transitional Qualified Status |
| Note | Germany | |
|---|---|---|
| QDMTT?(Enacted/Draft) | Is there a QDMTT in the Legislation? | Yes – Enacted |
| Effective Date: | Accounting Periods beginning after December 30, 2023 | |
| Administrative Guidance/Safe Harbour Guidance? | Are the provisions of the OECD Administrative Guidance and Safe Harbour Guidance reflected in the current legislation? | The Second Set of OECD Administrative Guidance is not reflected in detail. |
| Separate/Transposed QDMTT | Is the QDMTT a Separate QDMTT or a Transposition of the GloBE Rules (with Amendments) | Transposed |
| Domestic Groups | A QDMTT can also apply to purely domestic groups. | Yes |
| Scope Definitions | The definitions of Ultimate Parent Entity, MNE Group, and Constituent Entity correspond with the definitions in the GloBE Rules. | Yes – Included under Section 90 |
| Income and covered taxes of Constituent Entities | The QDMTT must compute the tax liability for the jurisdiction by taking into account the income and covered taxes of Constituent Entities under the GloBE Rules. | Yes – Included under Section 90 |
| Separate ETRs | A QDMTT must determine a separate ETR and Top-up Tax amount for MOCEs, Joint Ventures and JV Subsidiaries. | Yes – Included under Section 90 |
| Charging | A QDMTT must impose a Top-up Tax on one or more domestic Constituent Entities on the Excess Profits of all domestic Constituent Entities, including the domestic Parent Entity. | Yes – Included under Section 90 |
| Enforceability | The legal liability for the domestic top-up tax needs to be enforceable against at least one Constituent Entity in the jurisdiction. | Yes -Section 83 |
| Different Accounting Standard? – Optional | Is the use of a local accounting standard optional? | No |
| Different Accounting Standard? – Mandatory | Is the AG2 guidance followed? | No |
| Different Accounting Standard? – Default GloBE rules | Do the general GloBE rules apply for the QDMTT accounting standard? | Yes |
| Require 100% ownership? | The QDMTT )can require 100% ownership | No |
| Differences to GloBE Rules: tighter restriction is consistent with local tax rules | The QDMTT can be more restrictive than the GloBE Rules where the tighter restriction is consistent with local tax rules. | None |
| Differences to GloBE Rules: Not relevant to in the context of its domestic tax system | The QDMTT can exclude adjustments that are not relevant to in the context of its domestic tax system. | None |
| Income/Loss of a PE | The QDMTT must exclude the income or loss of a foreign Permanent Establishment from the income or loss of the Main Entity. | Yes – Included under Section 90 |
| Tax Transparency | A QDMTT must include certain tax transparent provisions. | Yes – Included under Section 90 |
| Adjusted Covered Taxes Consistency | The range of taxes included in Covered Taxes needs to be the same or narrower, as under the GloBE rules. | Yes – Included under Section 90 |
| GloBE Loss Election? | Not Required in QDMTT | Yes – Included under Section 90 |
| No Pushdown to CFC or PE | A QDMTT must exclude: (1) tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules and (2) tax paid or incurred by a Main Entity that is allocated to a PE in the jurisdiction. | Yes Provided – Section 92 |
| Exclude tax allocated to Hybrids | Second AG Guidance | Yes Provided – Section 92 |
| Exclude allocated net basis tax on dividends (except WHT) | Second AG Guidance | Yes Provided – Section 92 |
| UPE that is a Flow-Through Entity | Second AG Guidance | Yes – Included under Section 90 |
| UPE subject to Deductible Dividend Regime | Second AG Guidance | Yes – Included under Section 90 |
| Eligible Distribution Tax Systems | Second AG Guidance | Yes – Included under Section 83 |
| ETR Computation for Investment Entities | Second AG Guidance | Yes – Included under Section 90 |
| Investment Entity Tax Transparency Election | Second AG Guidance | Yes – Included under Section 90 |
| Taxable Distribution Method Election | Second AG Guidance | Yes – Included under Section 90 |
| Multi-Parented MNE Groups | Second AG Guidance | Yes – Included under Section 90 |
| Additional Top-Up Tax/Excess Negative Tax Expense | A QDMTT needs to have provisions for additional top-up tax where there is no Net GloBE Income and the Adjusted Covered are less than zero and less than the Expected Adjusted Covered Taxes. Amount. Excess Negative Tax Carry-forward rules also need to be in place. | Yes – Included under Section 90 |
| Modified Top-Up Tax Formula | The QDMTT top-up tax formula needs to be modified as the GloBE Rules subtract tax paid under a QDMTT from the current GloBE Top-up Tax. | Yes – Section 93 |
| Same Approach As GloBE Rules | A QDMTT must require that top-up tax is taken into account by the relevant Constituent Entity at the same time and in the same manner as under the GloBE Rules (eg it can’t be carried forward). | Yes – Included under Section 90 |
| SBIE Included? | Not Required in QDMTT | Yes – Included under Section 90 |
| SBIE Rates same as GloBE? | Not Required in QDMTT | Yes – Included under Section 90 |
| De Minimis Rule Included? | Not Required in QDMTT | Yes – Included under Section 90 |
| Restructuring Rules? | A QDMTT needs to include restructuring rules as provided in the GloBE rules to the extent necessary to conform to the tax reorganization rules in the jurisdiction. | Yes – Included under Section 90 |
| Safe Harbours? | A QDMTT needs to contain GloBE safe harbours. | Yes – Included under Section 90 |
| Deferred Tax Transition Rule? | A QDMTT must include the deferred tax starting point under Article 9.1.1 of the Model Rules. | Yes – Included under Section 90 |
| SBIE Transitional Rates? | Not Required in QDMTT | Yes – Included under Section 90 |
| Initial Phase of International Activity Exemption | Not Required in QDMTT | Yes – Included under Section 90 |
| Elections? | Where the GloBE Rules permit an election, a QDMTT must generally also provide for the election and require the MNE Group to make the same election under the QDMTT as is made under the GloBE Rules. | Yes – Included under Section 90 |
| Deferred Tax transition: First time or refreshing rule? | Second AG | None |
| New transition year – amend tax attributes? | Second AG | None |
| Currency provisions? | Second AG | None |
| DTL Recapture rules – Aggregate DTL Categories | Fourth AG, 1.2.8 | |
| DTL Recapture rules Unclaimed Accrual Five-Year Election | Fourth AG, 1.2.8 | |
| Reverse Hybrid Pushdown | Fourth AG, 5.6.2 | |
| Securitization Entities – A QDMTT may also exclude a Securitisation Entity from its scope | Fourth AG, 6.1.4 | |
| Securitization Entities – A jurisdiction may allocate the QDMTT liability for any QDMTT top-up tax to another Constituent Entity (if any) that is located in the jurisdiction | Fourth AG, 6.1.4 | |
| Note |
| Germany | ||
|---|---|---|
| Effective Date: | Accounting Periods beginning after December 30, 2023 | |
| Section/Article | ||
| Safe Harbour & Penalty Relief Guidance | De Minimis Test | 84(1) |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR Test | 84(1) |
| Safe Harbour & Penalty Relief Guidance | Routine Profits Test | 84(1) |
| Safe Harbour & Penalty Relief Guidance | Simplified Covered Tax defn (inc exclusion of uncertain tax positions) | 87(3) |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR defn | 87(6) |
| Safe Harbour & Penalty Relief Guidance | Transition Period | 84(1) |
| Safe Harbour & Penalty Relief Guidance | Transition Rate | 87(7) |
| Safe Harbour & Penalty Relief Guidance | Defn of Qualified Financial Statements | 87(1) |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Joint Ventures | 85(1) |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Tax Neutral UPEs | 85(2)/(3) |
| Safe Harbour & Penalty Relief Guidance | Special Rules for Investment Entities and their Constituent Entity-owners | 85(4) |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Net Unrealised Fair Value Loss | 87(5) |
| Safe Harbour & Penalty Relief Guidance | Exclusions | 86 |
| December 2023 OECD Administrative Guidance | ||
| 1 | Transitional CbCR – Purchase Accounting Adjustments(consistent reporting condition, goodwill impairment adjustment) | draft law 87a |
| 2.2.1 | Transitional CbCR – JVs | draft law 85 |
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | draft law 87 |
| 2.3.2 | Transitional CbCR – Using different accounting standards | draft law 87 |
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | draft law 87 |
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | draft law 84 |
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | draft law 87 |
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | |
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | draft law 87b |
| January 2025 OECD Administrtive Guidance | ||
| Amendments to CbCR Safe Harbour for 9.1 | draft law 87 |
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