Corporate taxation

Starting in 2023, a uniform minimum tax of 15 % will apply to large corporations in quite a large number of countries. The German Federal Chamber of Tax Consultants welcomes the guidelines suggested by the EU Commission to introduce an effective minimum tax in the EU, but warns against increasing bureaucracy and duplicate charges for affected companies. The Commission's proposal is designed to implement the global effective minimum tax negotiated on the OECD level uniformly in all 27 EU member nations.

Overview of key points of the global minimum tax:

• Multi-national group companies that reported annual revenues of at least € 750 million in at least two of the last four years on their consolidated financial statements will be subject to an effective minimum tax of 15 %.
• The 15 % effective taxation will generally be ensured through a “top-up” calculation. This means: If the parent company is located in the EU, it will be subject to a “top-up” tax for its international subsidiaries that are subject to lower tax rates, until the entire corporate group reaches the 15 % threshold.
• In contrast to the OECD, the minimum tax in the EU will also apply to wholly domestic companies, in order to avoid unequal treatment of international and fully domestic matters, which would violate union rights.

The BStBK requires that at least the companies affected by the minimum tax be released from other regulations with the same purpose in return. In addition, the Chamber requires a review of the extent to which other standards designed to prevent abuse, such as parts of the Anti Tax Avoidance Guidelines ATAD 1 and 2, controlled foreign corporation taxation under the Foreign Tax Act and the interest barriers are still necessary.