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German tax authorities appear to be re-evaluating the availability of withholding tax relief on dividend distributions to US-owned German entities treated as disregarded for US tax purposes. While no formal denial has yet occurred, recent information requests indicate a potential shift in administrative practice with significant implications for US investors.

On November 20, 2025, the Federal Fiscal Court (BFH) made an important decision regarding the tax treatment of parking space costs in the context of double household management during an oral hearing (case no. VI R 4/23). The central question was whether, following the revision of Section 9 (1) sentence 3 no. 5 of the German Income Tax Act (EStG), parking space costs should be classified as other additional expenses or as accommodation costs limited to €1,000.

Electromobility continues to gain importance—and there are also significant new developments in tax law: Starting January 1, 2026, the electricity price allowance will come into effect. Its purpose is to enable both employers and employees to settle electricity costs much more easily when the charging of a company car is initially paid privately, for example via a home charging station. The basis for this is the average annual electricity price for private households published by the Federal Statistical Office. In the future, employers can choose between providing proof of actual costs and using the new electricity price allowance. This not only reduces administrative effort but also allows for optimal tax treatment when reimbursing electricity costs.

Price is important, but by no means everything. Multinational companies must evaluate professional expertise, technology, governance, and transformation capability in a holistic way. This article shows which criteria really matter and what is essential in practice.

The selection of a global service provider is complex and strategically crucial. A properly structured selection process creates transparency, reduces risks and allows well-founded decisions to be made. Find out how you can carry out the market analysis, requests for proposal and evaluation of the bids.

A year after publishing its first circular on e-invoices, the Federal Ministry of Finance (BMF) has published a second circular to further define the rules on electronic invoicing. The Circular, dated 15 October 2025, updates the Circular of 15 October 2024 and amends the VAT Application Decree (Umsatzsteueranwendungserlass – UStAE). In this article, we explain the main changes and clarifications in the second Federal Ministry of Finance circular on e-invoicing. Businesses should familiarise themselves with the new requirements to check and validate e-invoices in advance to efficiently push forward the digitalisation of their invoicing processes.

Since 2022 the “everlasting deferral” for exits from Germany has also been rescinded and not replaced for changes to residence within Europe. Businesspeople and natural persons with shares in corporations of more than one percent now have to pay exit tax straight away. Distributing this in instalments over seven years is only a little help with liquidity planning be-cause the tax authorities usually require the full amount to be paid up front as security. A Polish court has now referred three questions to the ECJ, which, with regard to the European law concerns, could also be relevant to Germans moving abroad.

In our previous post we examined the success factors for international outsourcing projects. Now we show you which KPIs are crucial for quality, performance and compliance.

On October 15, 2025, the German Federal Government issued the draft for the so-called "Flexible Retirement Act" (“Aktivrentengesetz”). The aim of this law is to provide tax relief for employees who continue to work in jobs subject to social security contributions after reaching the statutory retirement age.

In its judgement on 16 July 2025 (file no. I R 1/23) the Federal Fiscal Court (so-called Bundesfinanzhof – BFH) handed down a decision with practical relevance on the utilisation of losses when a change of control occurs during the year. Particularly important is that a loss carry-back under section 10d of the Income Tax Act (so-called Einkommensteuergesetz - EStG) remains possible if an acquisition that is detrimental under section 8c of the Corporation Tax Act (KStG) has been made. The judgement creates new room to manoeuvre for restructuring and transferring participating interests.

High energy costs are an increasing challenge to many businesses. To mitigate the burden of costs at least partially they can claim tax benefits (tax exemptions, tax relief, etc.) under the German Electricity Tax Act [StromStG] and Energy Tax Act [EnergieStG]. But businesses in difficulty as defined by European state aid law are excluded from this. This also includes some businesses that are actually not in financial straits at all. But a recent court judgement and new practice at the customs authorities means they are now threatened with the loss of these tax benefits.

As of July 1, 2025, the process for determining parental status and the number of children to be considered for the calculation of long-term care insurance contributions has been digital-ized. The German authorities now automatically transmit the relevant data to the contribution-paying entities. Under certain conditions, this procedure also allows for retroactive corrections of long-term care insurance contributions, going back as far as July 1, 2023. What does this mean for you as a company and employer?

Recent legislative changes and upcoming administrative guidance have brought important updates to the (wage) tax treatment of employer-provided benefits, particularly regarding incentives for company cars with alternative engines and reimbursement of electricity costs. In this article, we provide an overview of the current (wage) tax regulations for company cars and outline the differences between lump-sum and itemized reimbursement models for charging electric vehicles. Employers will gain practical insights into how to implement these benefits in a tax-optimised and legally compliant manner.

If the penultimate partner of a limited partnership (KG) leaves the partnership, the partnership assets are transferred to the last partner. As a result of such an "accretion", the question arises as to whether and to what extent the tax losses of the former KG can be used by the last remaining partner. Recently, the Federal Fiscal Court (BFH) (ruling of 19 March 2025, XI R 2/23) had to decide on the use of offsettable losses in accordance with Section 15a EStG and trade losses in accordance with Section 10a GewStG by the remaining limited partner - and ruled in favor of the taxpayer.

The ECJ specifies the 25% threshold to determine the social security law to be applied to cross-border work. Find out more now.

The provisional social insurance contribution assessment limits for 2026 have been announced and will now be proposed to the Bundestag. We summarize what employers need to know now.