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  • Service: Tax, International Corporate Tax, Global Indirect Tax, Mergers & Acquisitions, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 11/2/2012

Germany - Tax bill passed by lower house, with changes 

November 2: The German lower house (Bundestag) on 25 October 2012 passed a version of the 2013 Tax Act.

The tax legislation, as passed by the lower house, reflects changes to the government’s May 2012 draft version of the legislation, but does not include all proposals for modification made by the upper house (Bundesrat) in July 2012.


Changes adopted by the upper house but not recently passed by the lower house concern:


  • Repeal of the corporate income tax exemption for dividends and capital gains derived from the disposal of shares in corporations of which less than 10% was held (portfolio investment)
  • Extension of the correspondent taxation of hybrid financings in the context of dividend taxation
  • Prevention of real estate tax-blocker structures
  • A ban on loss offsets by receiving entity with positive income of transferring entity in corporate reorganizations
  • Changes to treatment of partnerships under income tax treaties

The lower house also approved certain amendments to the bill, including:


  • Measures concerning the reduction of statutory retention periods for tax records
  • Changes to the transfer pricing rules
  • Provisions concerning the place of supply, invoicing rules, and an expended reverse-charge procedure for value added tax (VAT) purposes

Read a November 2012 report (PDF 109 KB) prepared by the KPMG member firm in Germany: German Tax Monthly (November 2012)


The KPMG report also includes discussions of:


  • Action by the lower house on the rules for simplifying business tax and the rules for travel expenses
  • A court decision on loss limitation rules and the treatment of resales
  • A court decision providing no reversal of write-downs in instances of sister company mergers
  • Guidance on an expected permanent decline in the value of fixed-asset securities
  • A new income tax treaty between Germany and Spain that entered into force



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