Germany

Corporate - Significant developments

Last reviewed - 30 June 2022

Following the election of the German Federal Parliament (Bundestag) in September 2021, a new German government was formed in December 2021. The coalition parties agreed to several tax measures. The new coalition plans, inter alia, tax measures to stimulate investments in climate protection and digital assets, an extension of tax loss offset, the introduction of a so-called 'interest rate cap', the digitisation and de-bureaucratisation of the tax administration, and measures to combat tax fraud and evasion, especially through the implementation of the Organisation for Economic Co-operation and Development (OECD) GloBE project (worldwide minimum taxation), as well as introducing mandatory reporting requirements for national tax arrangements. Further, the coalition, inter alia, envisages a further tightening of the rules for real estate transfer tax on so-called 'share deals'. 

The war started by Russia in Ukraine March 2022 has became one of the major topics in current political discussions in Germany. The German tax administration has authorised relief in connection with the tax treatment of aid provided by companies or private households to the Ukraine.

The ever increasing inflation and the dramatically rising energy costs have led to the adoption of various forms of tax relief for private households, e.g. a so- called energy costs allowance for employed or self-employed tax payers. Further, the rate of energy tax on fuel has been lowered for a limited period of three months (from June to August 2022).

When the German Constitutional Court declared the interest rate of 0.5 % per month on unpaid tax/ refundable tax unconstitutional, Parliament was asked to introduce new rules by 31 July 2022 with retroactive effect from 1 January 2019 onwards. On 23 June 2022 the German Federal Parliament adopted a provision to reduce the interest rate to 0.15% per month. The law has to be confirmed by the German Federal Council; this is expected to occur in July 2022.