Germany’s Federal Ministry of Finance publishes form for notification of minimum tax group manager

Summary

On 17 October 2024, the German Ministry of Finance (MoF) published the Minimum Tax Group Head Notification Form, a concept specific to the German minimum taxation rules, which centralizes supplementary tax payments and reporting obligations at the level of a single constituent entity, the Minimum Tax Group Head.

The initial notification deadline is 28 February 2025 for multinational enterprise groups (MNE Groups) with a financial year equal to the calendar year; notification is likely to be possible from January 2, 2025, according to the notification. For MNE groups with a financial year that is different from the calendar year, the first notification deadline is 28 February 2026 in most cases.

Detailed discussion

For minimum tax purposes, Germany introduced a minimum tax group concept (“Mindeststeuergruppe“), which aggregates all additional taxes payable by German constituent entities under the Income Inclusion Rule (IIR), the Under-Taxed Profits Rule (UTPR) and Qualified Domestic Minimum Additional Tax (QDMTT) at the level of a single entity, the Minimum Tax Group Head (“Gruppenträger“). The concept is specific to Germany and is not covered by the Organization for Economic Co-operation and Development (OECD) model rules or the EU Directive 2022/2523 on ensuring a global minimum level of taxation. For administrative simplification purposes, the head of the minimum tax group is obliged to submit the German minimum tax declaration and pay the German supplementary tax on behalf of all other German constituent entities as well as co-responsibility.

Under current law (as of October 2024), the concept is relevant to all MNE groups falling under pillar two with at least two constituent entities (including permanent establishments) located in Germany, and regardless of whether there is a direct parent-subsidiary relationship between German constituent units. However, it should be noted that according to recent legislative proposals (“Jahressteuergesetz 2024″), the notification requirement must also be extended to groups with only one constituent entity located in Germany. This change is expected to become law this year, so the same deadlines are expected to apply to multinational groups with at least two constituent entities located in Germany.

If the ultimate parent entity (UPE) is domiciled in Germany, the UPE also holds the position of Minimum Tax Group Head. If the UPE is not domiciled in Germany and there is a German constituent entity which is the direct or indirect common parent of all other German constituent entities, this German parent entity is deemed to be the smallest tax group head. In all other cases, the MNE group’s UPE can assign the position of Minimum Tax Group Head to any German constituent entity. If the UPE does not assign the position of Minimum Tax Group Head, the “most economically significant” entity is deemed to be the Minimum Tax Group Head.

The minimum tax group manager must electronically notify the German Federal Central Tax Office (“BZSt“) and includes, among other things, the following information:

• Name and address of the minimum tax group manager and UPE — details of other constituent entities are not required
• The tax number for the Minimum Tax Group Head and UPE
• Information on determining the position of Minimum Tax Group Head
• Contact data for the archiving unit’s contact person
• Name and address of a representative if the notice is filed by a representative (eg a tax advisor)

The notification must be due within two months from the end of the calendar year in which the group is covered by the German minimum tax law. If the financial year of the MNE group is equal to the calendar year, the first notification is due on 28 February 2025. If the financial year is different from the calendar year, the first notification deadline is 28 February 2026, except in cases with a short financial year that ends before 1 January 2025. Changes in the position of Minimum tax group manager must be reported immediately. Electronic filing is announced to be possible from 2 January 2025.

The full text of the form is available on the MoF website and can be accessed directly here.