Germany: Exemption to Germany’s change-in-ownership rules expanded

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Germany: Exemption to Germany’s change-in-ownership rules expanded

Linn-Alexander
Braun-Thorsten

Alexander Linn

Thorsten Braun

The German tax reform 2015, published in the federal gazette on November 5 2015, includes a new exemption from the strict change-in-ownership rules that result in the forfeiture of tax loss carryforwards.

According to the change-in-ownership rules introduced in the 2008 business tax reform, a direct or indirect transfer of more than 25% of the shares of an entity to an acquirer will result in a pro rata forfeiture of tax loss carryforwards; a transfer of more than 50% of the shares will result in a complete forfeiture of tax loss carryforwards.

For transfers after December 31 2009, an exemption for intra-group reorganisations applied in cases where the 'same person' held directly or indirectly a 100% participation in both the transferring and the purchasing entity. However, the exemption did not apply to a share transfer from or to the ultimate parent entity and where the ultimate parent entity was not held by the 'same person', which would be the case, for example, for any stock exchange-listed company.

The tax reform 2015 extends the intra-group exemption rule to apply to changes of shareholders within a 100% controlled group, including the situation where an ultimate parent is the transferring or the purchasing entity and is held by more than one person. Additionally, the ultimate shareholder can be a partnership or an individual; this had been an area of uncertainty and the Federal Ministry of Finance had issued a draft decree that would not allow a partnership or individual to be the ultimate shareholder.

The new rules apply retroactively to share transfers taking place after December 31 2009, thus allowing taxpayers to benefit in cases where tax losses were already forfeited under the previous wording of the law.

Alexander Linn (allinn@deloitte.de) and Thorsten Braun (tbraun@deloitte.de)

Deloitte

Tel: +49 89 29036 8558 and +49 69 75695 6444

Website: www.deloitte.de

more across site & shared bottom lb ros

More from across our site

The plan aims to improve the efficiency, transparency, and effectiveness of direct tax administration in India
Meanwhile, South Africa’s finance minister has accepted a court decision on suspending a VAT increase and US President Donald Trump mulls a 100% tariff on foreign films
Jaime Carey speaks about the benefits of his tax background, DEI values, the use of AI for a smarter legal practice, and other priorities that will define his presidency
Historically low levels of attrition over consecutive years made a ‘difficult decision’ necessary, PwC has reportedly said
WTS Global is also vetting new potential member firms in Algeria, Cote D’Ivoire and Benin, Kelly Mgbor tells ITR in an exclusive interview
The scope of qualifying pillar two tax credits could reportedly be broadened; in other news, hundreds of IRS appeals staff are to resign
For many taxpayers, the prospect of long-term certainty that a bilateral APA offers can override concerns about time, cost and confidentiality
Levine, who served under the Joe Biden administration, led the US’s negotiations on the OECD’s two-pillar solution
The deal to acquire ITR's parent company is expected to complete by the end of May 2025
JBS, the biggest meat company in the world, allegedly used Luxembourgian ‘mailbox companies’ to avoid taxes between 2019 and 2022
Gift this article