Germany: Amendments to Pillar Two rules passed by lower house of Parliament; draft DAC9 legislation submitted to upper house of Parliament
Amendments to Pillar Two rules would implement OECD guidance
The lower house of Parliament (Bundestag) on November 13, 2025, passed the Act to amend the Minimum Tax Act in the version recommended by the Finance Committee.
The amendments aim to implement new OECD Administrative Guidance items from December 15, 2023, May 24, 2024, and January 13, 2025, and simplify individual anti-profit shifting regulations to avoid bureaucracy.
The legislation must now be approved by the upper house of Parliament (Bundesrat), which may occur before the end of this year.
In addition, the Ministry of Finance submitted to the Bundesrat (1) the draft ordinance on the implementation of the Minimum Tax Act on the scope, design, and exchange of information on minimum tax reports (DAC9), and (2) the draft bill to amend tax regulations relating to the Lithuania income tax treaty, FATCA, and permanent establishment profit allocation.
Other recent tax developments in Germany include:
- Federal Tax Court (I R 1/23): Application of the loss deduction limitation rule in the case of a detrimental change in ownership during the year
- Federal Tax Court (III R 23/23): No extended property deduction for sideline activity not expressly permitted
- Federal Tax Court (II R 31/22): Application of the real estate transaction tax (RETT) group exemption clause in cases of spin-off by way of absorption
- Lower Tax Court of Hesse (7 K 1188/21): Continuation of book value despite hidden encumbrances and transfer to the partner's business assets
Read a December 2025 report prepared by the KPMG member firm in Germany