The German legislator is currently introducing a large number of tax law changes in various draft bills. This article provides an overview of the most important planned changes.
The draft Annual Tax Act 2024 (JStG 2024) provides for the most extensive changes. These include, but are not limited to, the following:
Income Tax Act
Corporation Tax Act
Trade Tax Act
Investment Tax Act
Reorganization Tax Act
Value Added Tax Act
Real Estate Transfer Tax Act
The draft of a second law on the financing of future-proof investments (Zweites Zukunftsfinanzierungsgesetz - ZuFinG II) provides, among other things, for the implementation of tax measures of the federal government's so-called growth initiative.
From a tax perspective, the draft bill provides, among other things, for a harmonization of the regulations on so-called other entrepreneurial German source income, according to which, for the purposes of the InvStG, domestic commercial income only exists in the case of actual commercial activity or active entrepreneurial management, but not in the case of so-called deemed or contaminated partnerships (section 6 (5), (5a) and (5b) (new) InvStG).
The draft bill on the further development of tax law and the adjustment of the income tax rate (Tax Development Act - SteFeG; formerly the Second Annual Tax Act 2024) provides for adjustments to the income tax rate as well as the implementation of mandates from the coalition agreement and measures from the federal government's growth initiative.
Particularly controversial is the renewed introduction of a reporting obligation for domestic tax arrangements (sections 138k et seq. (new) AO), which is also rejected by the independent expert commission "Simplified Corporate Tax" appointed by the Federal Ministry of Finance, among others.
The draft bill to strengthen the German fund market and to implement Directive (EU) 2024/927 of the European Parliament and of the Council of March 13, 2024 amending Directives 2009/65/EC and 2011/61/EU with regard to delegation agreements, liquidity risk management, supervisory reporting, the provision of custody and depositary services, and lending by alternative investment funds (Fund Market Strengthening Act) provides in particular for amendments to the KAGB and consequential amendments.
Following the implementation of the second pillar as part of the Minimum Taxation Directive Implementation Act at the end of 2023 (see December 18, 2023 Legal Insights), the draft law to amend the Minimum Tax Act and other measures (Minimum Tax Amendment Act - MinStGAnpG) is intended in particular to clarify the application of the CbCR safe harbor in accordance with the new OECD administrative guidelines.
The Fourth Act to Reduce Bureaucracy for Citizens, Business, and the Administration (Fourth Bureaucracy Reduction Act - BEG IV), which has already been approved by the German Federal Parliament, provides for changes to VAT, income, and investment tax law in addition to adjustments to stock corporation and employment law, but these are cosmetic at best with regard to the legislative objective.
In the course of the legislative procedure, there may still be changes to the plans and the points mentioned.
It also remains to be seen whether all laws can be passed by the end of the year as planned.
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