Group parent report according to § 3 of the German Minimum Tax Act

With the publication of the Global Anti-Base Erosion Model Rules (Pillar 2) in December 2021 and the adoption of EU Directive 2022/2523 in December 2022, a global effective minimum taxation for international groups was launched. These requirements were transposed into national law in Germany by the Minimum Tax Act (MinStG), which came into force on January 1, 2024.

Reporting and declaration obligations under the German Minimum Tax Act

In principle, the German minimum tax affects all business units resident in Germany that belong to a group of companies that has generated consolidated revenue of more than € 750 million in at least two of the four preceding financial years.

The German company or, in the case of several companies in Germany, the so-called minimum tax group, in which all domestic business units are combined, is subject to the German minimum taxation procedure. In this context, all additional tax amounts determined for the German business units of the minimum tax group are attributed to the so-called group parent (usually the top-level German company), which is deemed to be the sole taxpayer. This is intended to simplify the administration and collection of the German minimum tax.

The German group parent must generally file a minimum tax return for each fiscal year using an officially designated electronic interface and calculate the minimum tax itself via self assessment. In addition, there is an obligation to file a minimum tax report for each fiscal year for the purposes of the international exchange of information between tax authorities.

German Minimum tax group and group parent

As part of the group parent reporting, all tax-relevant data of a minimum tax group are centralized and consolidated to ensure compliance with the rules on German minimum taxation. The German minimum tax group includes all business units of a corporate group which are taxable in Germany.

The group parent, which is liable for the minimum tax, is usually the top-level parent company, provided that it is resident in Germany. If this is not the case, the group parent is the parent company resident in Germany which combines all domestic business units. If this is not the case within a multinational group, the top-level parent company can designate one of the German taxable business unit as the German group parent. If no such designation is made, the most economically significant business unit located in Germany is deemed to be the German group parent. The German group parent is thus designated using the “top-down approach”.

Submission of the German group parent notification

The German group parent is responsible for submitting the group parent notification electronically. The group parent notification must be submitted electronically to the Federal Central Tax Office (BZSt) in accordance with the officially determined data set no later than two months after the end of the first tax period for the German minimum tax group. For example, if the financial year is the calendar year, the report for the 2024 financial year must be submitted by February 28, 2025 at the latest. The report designates the domestic group parent that is subject to the German minimum tax to the tax office and submits the minimum tax return for the minimum tax group. This centralizes the procedure and simplifies the administration of the minimum tax obligations.

The template for the German group parent notification and its revocation can be downloaded from the BMF website – see also BMF circular dated October 17, 2024. It has been possible to submit the group parent notification electronically via the online portal of the Federal Central Tax Office (BZSt) since January 2, 2025.

Information required in the German minimum tax group parent notification

The report includes the following information in particular:

• Name and address of the group parent and the ultimate parent company;
• Tax identification numbers of the ultimate parent company and the group parent;
• Information on the legal basis for the designation as German group parent ;
• Contact details of a contact person at the reporting company;
• In case of representation: name and address of the representative and a copy of the current power of representation.

Recommended action

Affected corporate groups should check at their earliest convenience which German business unit is to act as the German minimum tax group parent and submit the required notification in due time. In particular, smaller German units of foreign corporate groups are dependent on information from the international group tax departments in order to fulfill the compliance requirements.