The head of a multinational enterprise (MNE) group in Germany that is subject to the global minimum taxation rules under Pillar Two generally must submit the Group Head Declaration Form to the German tax authorities by 28 February 2025.
Germany’s implementation of the EU “Pillar Two” Directive includes the concept of a minimum tax group (Mindeststeuergesetz (MinStG)). Such a group consists of the taxable entities in Germany (i.e., German constituent entities (CEs) and joint ventures and subsidiaries), with the head of the group responsible for taxes arising from Pillar Two (under the income inclusion rule, undertaxed payment rule and qualified domestic minimum top-up tax) and filing the Pillar Two tax return.
Under Germany’s rules, the group head must be determined by the end of the taxable period for which the tax liability arose and it must electronically notify the tax authorities of its status as such within two months after the end of that taxable period.
Under Germany’s Pillar Two law (i.e., MinStG, §3 paragraph 3), a “top-down” approach is to be used to determine the head of a group:
As noted above, once the head of a calendar year group is identified, it must notify the federal tax office by 28 February 2025. Taxpayers with a financial year (the financial year of the UPE being the determining factor) that deviates from the calendar year must be registered by 28 February of the year following the end of the financial year.
The filing must include the following information:
Benedikt Fürst
Henrik Meyer
BDO in Germany
Germany’s implementation of the EU “Pillar Two” Directive includes the concept of a minimum tax group (Mindeststeuergesetz (MinStG)). Such a group consists of the taxable entities in Germany (i.e., German constituent entities (CEs) and joint ventures and subsidiaries), with the head of the group responsible for taxes arising from Pillar Two (under the income inclusion rule, undertaxed payment rule and qualified domestic minimum top-up tax) and filing the Pillar Two tax return.
Determination of the Group Head
Under Germany’s rules, the group head must be determined by the end of the taxable period for which the tax liability arose and it must electronically notify the tax authorities of its status as such within two months after the end of that taxable period.Under Germany’s Pillar Two law (i.e., MinStG, §3 paragraph 3), a “top-down” approach is to be used to determine the head of a group:
- If the ultimate parent entity (UPE) is based in Germany, that entity is the group head;
- If the UPE is not based in Germany but there is a local entity that controls all other members of the group in Germany, the controlling entity is the group head; and
- In all other cases, the UPE must designate the head of the group. If the UPE does not make a designation, the group head is the economically most important CE of the group. The German tax authorities will make the designation if the UPE does not.
Filing Requirements
As noted above, once the head of a calendar year group is identified, it must notify the federal tax office by 28 February 2025. Taxpayers with a financial year (the financial year of the UPE being the determining factor) that deviates from the calendar year must be registered by 28 February of the year following the end of the financial year.The filing must include the following information:
- Name and address of both the tax group head and the UPE;
- Tax identification numbers of the group head and the UPE;
- Information on the legal obligations arising from designation as the head of the group; and
- Details of a contact person and a representative of a filing CE.
Benedikt Fürst
Henrik Meyer
BDO in Germany