German Federal Council Adopts BEPS Legislation

The German Federal Council approved Country-by-Country Reporting and other BEPS related measures. These were approved by the Federal Parliament earlier on December 2 after several months of discussions on the approval of specific measures.

Country-by-Country (CbC) Reporting

As expected, Germany will align with the EU by adopting Country-by-Country reporting and rules on the automatic exchange of information. Germany signed the OECD Multilateral Competent Authority Agreement on the Exchange of CbC Reports ("CbC MCAA") with 30 other countries on January 27, 2016. On October 25, published legislation said that Germany intends to keep CbC reporting information confidential.

Other Measures Adopted

Furthermore, the Federal Council and the Federal Government adopted a measure preventing German partnership to deduct expenses if they reduce the tax base of a partner in another jurisdiction, known as "double dip". The measures also amend controlled foreign corporation (CFC) rules, under which the income will be considered as generated by the domestic permanent establishment (PE) and so taxed under Trade Tax Act.

The new measures will apply to tax years beginning on or after January 1, 2017.

Sources:  Tax-News, Thomson Reuters


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