International Taxation

Germany: Changes in the Taxation of Add-Back and the License Barrier According to the RefE-MinBestRLUmsG

An overview by Flick Gocke Schaumburg, Taxand Germany

On 1 July 2023, the Federal Ministry of Finance (BMF) presented a draft bill called the Minimum Taxation Directive Implementation Act (RefE-MinBestRL-UmsG), aiming to implement the global minimum taxation (“Pillar Two”) through a new minimum tax law (MinStG) and several other noteworthy changes, expected to be applicable from 1 January 2024.


The key points of the bill include:

  • Lowering the threshold for low-taxed passive income subject to additional taxation from the current 25% to 15%.
  • Abolition of trade tax liability on add-back amounts.
  • Abolition of the license barrier that restricts the deduction of operating expenses.
  • Instituting a requirement that notifications and declarations must be transmitted electronically.

Gabriel Hörnicke and Carsten Quilitzsch of German Taxand member firm, Flick Gocke Schaumburg, analyse the bill, its potential effects, and timeline in detail.

Read the full analysis here.


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