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Germany: Legislation increasing maximum amount for roll-over of hidden reserves in corporation shares enacted; other tax developments

Act to Promote Private Investment and Germany as a Financial Centre promulgated on February 9, 2026.

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February 25, 2026

The Act to Promote Private Investment and Germany as a Financial Centre, which was promulgated on February 9, 2026, increased the maximum amount for the roll-over of realized hidden reserves from the sale of shares in corporations held as business assets, to preferential reinvestment assets (e.g., shares in corporations or buildings), from €500,000 to €2 million, appliable to capital gains arising in financial years beginning after February 9, 2026.

Other recent tax developments in Germany include:

  • Current Federal Tax Court decision on employee share ownership schemes
  • Lower Tax Court of Berlin-Brandenburg (10 K 10106/23): Crediting foreign withholding tax against domestic trade tax
  • Federal Ministry of Finance: Draft guidance on tax authorities’ principles for concept of permanent establishments (PEs)

Read a March 2026 report prepared by the KPMG member firm in Germany

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