Germany: Draft of updated guidance on reorganization tax law

Updated guidance contains clarifications and specifications of the Reorganization Tax Decree

Updated guidance contains clarifications and specifications

The Federal Ministry of Finance (BMF) on 11 October 2023 published a draft of updated BMF guidance on the application of the German Reorganization Tax Act.

The guidance addresses:

  • Scope of application
  • Tax consequences of conversions and contributions
  • Transfer of assets in the case of a merger with a partnership or with a natural person and conversion of a corporation into a partnership
  • Splitting up, splitting off and transfer of assets (partial transfer)
  • Trade tax
  • Contribution of parts of a business to a corporation or cooperative and exchange of shares
  • Contribution of a business, part of a business or business partner share to a partnership
  • Conversion of a partnership into a corporation or cooperative
  • Prevention of abuses
  • Application rules and authorization

According to the BMF, the updated guidance contains clarifications and specifications of the Reorganization Tax Decree of 11 November 2011 and takes into account the amendments to the law and decisions of the Federal Tax Court on the Reorganization Tax Act that have occurred over the past twelve years since its publication.

For example, with the Act to Modernize Corporate Tax Law of 25 June 2021, restrictions to EU member states and EEA states contained in the Reorganization Tax Act have been lifted for tax transfer dates after 31 December 2021 and the scope of application of the Reorganization Tax Act has thus been opened for certain transformations of corporations.

Read an October 2023 report [PDF 360 KB] prepared by the KPMG member firm in Germany



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