Germany: Application of minimum taxation rules resulting in permanent loss of tax loss carryforwards upheld (Federal Fiscal Court decision)
Application of minimum tax rules not unconstitutional but taxpayer may be entitled to equitable relief
The Federal Fiscal Court (BFH) in April 2026 held in case I R 20/25 (formerly I R 59/12) that application of Germany’s minimum taxation rules, which resulted in the permanent loss of tax loss carryforwards for an insolvent taxpayer, was not unconstitutional.
However, the BFH held that when the minimum tax rules lead to permanent effects arising from reversals for tax accounting purposes, the taxpayer may be entitled to equitable relief under Section 163 of the German Fiscal Code.
Read a September 2026 report prepared by KPMG’s EU Tax Centre