No determination of the tax contribution account for cross-border reorganizations required anymore:

• In the case of cross-border reorganizations from fiscal year 2025 onwards, at the time of the transfer of the assets it will no longer be necessary to determine the contributions other than those into share capital made to the transferring corporation. This shall simplify the reorganizations where a tax contribution account has not previously been determined or documented.

Trade tax reduction for real estate:

• The simple trade tax reduction for real estate will be linked to the property tax actually recorded as a business expense in the respective fiscal year for real estate belonging to the entrepreneur's business assets; previously, it was intended to be based on the property tax value.

Allocation of real estate / properties for German RETT purposes:

• Introduction of a new regulation regarding the allocation of real estate properties to a company for the purpose of share deals under German RETT which shall apply from 6 December 2024 onwards.

Transitional regulation for the application of the arm's length principle according to German Foreign Tax Act on the expenses resulting from a cross-border financing relationship within a multinational corporate group:

• This arm's length principle does not apply to such expenses incurred by 31 December 2024, where the respective agreement was legally agreed upon and whose actual execution began before 1 January 2024. If there is a significant change to the affected financing relationships after 31 December 2023, and before 1 January 2025, the newly introduced rules regarding the arm’s length remuneration for financing transaction and its documentation do not apply to those expenses incurred before the significant change of the respective financing relationship.

The 4th Bureaucracy Relief Act includes, among others, the following tax regulations:

• The maximum validity period of an exemption certificate regarding German WHT is extended from three to five years, effective from 1 January 2025.
• After the general tax audit announcement and without a separate request, several transfer pricing records will have to be submitted within a 30-day-period, including the newly introduced transaction matrix, the groups master file as well as the records of extraordinary transactions, if applicable. The extension of documentation requirements initially planned to be applicable from 1 January 2025 shall not apply.

Introduction of Act on Administrative Cooperation in the Field of Taxation and Modernizing Tax Procedure Law:

• Statute of limitations begins 5 years after the start of the tax audit at the latest; applicable for the first time to taxes and tax refunds arising after 31 December 2024.
• Qualified cooperation request during tax audits and extension of the obligation to adjust tax returns for post-audit periods apply for the first time to taxes and tax refunds arising after 31 December 2024; applicable also for taxes and tax refunds arising before 1 January 2025, if a tax audit for these taxes and refunds was announced after 31 December 2024.

Act on the Modernization of the Relief from Withholding Taxes and of the Certification of Withholding Taxes:

• This Act stipulates that the extended requirements for the certification and reporting of investment income subject to German WHT to the German Federal Tax Office will apply to investment income received by the creditor after 31 December 2024.

Early return of contributions relating to current profits and profit reserves through advance distribution:

• The resolution before the end of the business year (e.g., 30 December) for an advance distribution of a corporation may reduce the corporation’s distributable profit to zero at the end of this business year with the consequence that the payment of this dividend in the following business year (e.g., 2 January) may be sourced from the tax contribution account with the recipient having no dividend income. As a result, such a repayment out of tax contribution account should not trigger German WHT of c. 26.4%.