Germany: Draft amendments to Pillar Two rules; other tax developments

Draft amendments would implement OECD Administrative Guidance

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August 22, 2025

The Ministry of Finance on August 8, 2025, published draft amendments to the Minimum Tax Act which would implement new OECD Administrative Guidance items from December 15, 2023, May 24, 2024, and January 13, 2025. The draft legislation would also simplify individual anti-profit shifting regulations to avoid bureaucracy.

Other recent tax developments in Germany include:

  • Ministerial draft bill for a Second Act to Strengthen Company Pension Schemes
  • Government draft bill for an Act to Modernize and Digitalize the Fight Against Illegal Employment
  • CJEU reference (VIII R 21/22): Potential violation of free movement of capital by withholding tax on dividends for third-country corporations
  •  Federal Constitutional Court (2 BvL 19/14): Regulations on minimum profit taxation are compatible with Constitutional law
  • Federal Tax Court (II B 13/25): Serious doubts regarding the legality of a double assessment of real estate transfer tax (RETT) in so-called signing-closing cases

Read an August/September 2025 report prepared by the KPMG member firm in Germany

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