Bundestag adopts Minimum Tax Directive Implementation Act
On 10 November 2023, the German national parliament passed the Act on the Implementation of Council Directive (EU) 2022/2523 to ensure global minimum taxation and other accompanying measures (also known as the Minimum Tax Directive Implementation Act) in the version recommended by its Finance Committee on 8 November 2023.
Compared to the draft approved by the Federal Cabinet, the version of the Act now passed by the German Bundestag has been adapted to the guidelines and announcements that have since been issued at OECD level. Specifically, the following changes have been made to the new Minimum Tax Act compared to the draft law:
- Addition to Section 27 (1) MinStG-E on the treatment of tax allowances that were granted in connection with investments and reducing their acquisition or production costs
- Additional regulations for determining the assessment bases for marketable and transferable tax allowances (Section 28 MinStG-E)
- Addition of regulations on the treatment of tax advantages for participation in certain tax-transparent entities (Section 29 MinStG-E)
- Addition to the consideration of recognized national supplementary taxes when determining the tax increase amount (section 54 (2) MinStG-E)
- Modifications to the eligible employees under Section 59 MinStG-E and the eligible tangible assets under Section 60 MinstG-E
- Renaming of the previous simplification for immaterial business units to safe harbor for simplified calculations and adaptation of the regulations to the administrative guidelines for the administration of the GloBE model regulations in Sections 79, 80 MinStG-E
- Amendment of the safe harbour rule for recognized national supplementary tax (section 81 MinstG-E)
- Insertion of a provision on the secondary supplementary tax safe harbor amount in section 89 MinStG-E
- Supplementary regulation on currency conversions in the taxation procedure (Section 97 MinStG-E)
- Authorization of the Federal Ministry of Finance, with the approval of the Federal Council, to issue regulations on the scope, more detailed structure and exchange of information regarding the minimum tax report by statutory order (Section 99 (3) MinStG-E)
- Opening clause for further safe harbor regulations that can be issued by ordinance by the Federal Ministry of Finance with the approval of the Federal Government of Germany (Section 99 (4) MinStG-E)
Note: In order to enter into force, the draft law must still pass the German legislative procedure in full.