Read our insights, reports and more

German Federal Fiscal Court confirms potential 0% withholding tax relief for US S-Corporations and comparable hybrid structures. In a decision published recently (BFH dated 11 March 2026 – I R 13/23), the German Federal Fiscal Court (Bundesfinanzhof – BFH) confirmed that the participation exemption under Art. 10(3) of the US–Germany Double Tax Treaty (“DTT US”) may also apply to qualifying US S-Corporation (“S-Corp”) structures. The decision may also have implications for certain US LLC structures and other hybrid entities.

On 5 January 2026 the 147 countries and jurisdictions included in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS Inclusive Framework) agreed on the main elements of a package for the Side-by-Side System in OECD global minimum taxation.

On 6 August 2025 the Federal Ministry of Finance (BMF) sent its draft bill on the German Minimum Tax Amendment Act (MinStAnpG) to the industry associations. The bill contains extensive amendments to the Minimum Tax Act (MinStG; Pillar 2), implements the DAC9 Directive and adds relevant provisions to the Income Tax Act (EStG) and the Foreign Tax Act (AStG). The main points are new rules to prevent avoidance strategies related to global minimum tax, abolishing the royalty deduction limitation rule and changes to the controlled foreign corporation rules.