Germany: Tax reform bill and draft law on future financing passed by Parliament, other tax developments

Recent tax developments in Germany

Recent tax developments in Germany

The lower house of the German Parliament (Bundestag) passed the “Act to strengthen growth opportunities, investment and innovation as well as tax simplification and tax fairness” which contains a large number of amendments in various areas of tax law, including:

  • Restrictions on the deduction of interest expenses
  • Improvement of the tax loss deduction
  • Climate protection investment premium
  • Improvement of deprecation possibilities and further investment incentives
  • Partnerships

Extensive changes were made in the course of the Bundestag resolution to the proposed legislation as originally published by the Federal Ministry of Finance (BMF). Read TaxNewsFlash

In addition, the Bundestag and the upper house of the German Parliament (Bundesrat) passed the law on the financing of future-proofing investments that includes the following tax measures aimed at facilitating employee share ownership:

  • Tax exemption for the transfer of employee share ownership at a discount
  • Deferral model for employee share ownerships provided at a discount

Consistent with the proposed legislation published by the BMF, the measures are proposed to become effective in 2024. Read TaxNewsFlash

Read a December 2023 report [PDF 412 KB] prepared by the KPMG member firm in Germany

Other recent tax developments in Germany include:

  • Circumstances of the group of companies may be considered in applying the new German anti-treaty shopping rule (§ 50d (3) EStG new version) as part of the so-called motive test (Lower Tax Court of Cologne, decision 2 K 1315/13).
  • Avoidance of double-dip arrangements rule (§ 4i EStG) does not apply in the case of Dutch group taxation (Lower Tax Court of Münster, decision 10 K 2613/20 F).



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