What is the German minimum tax group?

German constituent entities of an MNE group as well as German joint ventures including their subsidiaries located in Germany form the German minimum tax group. If an MNE group has only one constituent entity in Germany, draft legislation states that this constituent entity also forms a German minimum tax group.

The German minimum tax group is mandatory and automatically established by law. Under German law the head of the German minimum tax group is required to:

• file the German minimum tax return, and
• pay the top-up tax (IIR, UTPR, QDMTT)

for the German minimum tax group. However, the members of the minimum tax group whose top-up tax is paid by the head of the group are jointly and severally liable for the minimum tax owed by the latter.

In return for the minimum tax payments, the head of the minimum tax group holds a compensation claim against those members of the minimum tax group. On the other hand, it has the obligation to forward to the minimum tax group members any refunds of top-up taxes it receives on their behalf.

What is the deadline for the head of the minimum tax group to file the notification with the German tax authorities?

The notification of the head of the minimum tax group must be filed with the German Federal Central Tax Office no later than two months after the end of the taxable period. In the case of a financial year beginning on January 1, 2024, the notification has to be made by February 28, 2025.

The German Federal Ministry of Finance published the form for the notification on October 17, 2024. The form for the notification needs to be filed electronically and the filing is expected to be possible starting on January 2, 2025.

A later change in the head of the German minimum tax group also must be electronically reported by both the former and the new head of the minimum tax group. In addition, the latter must inform all other German minimum tax group members of its function as the head of the minimum tax group.