Bundestag approved a revised law implementing OECD Pillar 2 rules, while rejecting a Greens motion aimed at strengthening the global minimum tax and retaining the licence barrier.
Germany’s lower house of parliament (Bundestag) approved the second revised draft of a law amending domestic Pillar 2 rules and related measures on 13 November 2025.
The legislation, formally titled “Law to Amend the Minimum Tax Act and Implement Additional Measures” (21/1865, 21/2467, 21/2669 No. 24), was adopted in the version amended by the Finance Committee (21/2751). CDU/CSU and SPD voted in favour, while AfD, Bündnis 90/Die Grünen (Greens), and Die Linke opposed. A financial feasibility report from the Budget Committee under Section 96 of the Bundestag’s rules (21/2792) was also submitted.
The Bundestag rejected a motion by the Greens titled “Prevent Tax Planning – Strengthen Minimum Tax” (21/2245), which sought to enhance international tax cooperation and retain rules on the so-called “licence barrier.” The motion was supported by the Greens and the Left but opposed by the Union, AfD, and SPD.
Key Features of the Law
The law transposes OECD guidelines on global minimum taxation into German law. Notably, it changes how deferred taxes are recognised within full calculation if they are unreported due to elections or offsets in minimum tax annual surpluses or deficits. Certain anti-profit-shifting rules have also been limited to essential measures to reduce bureaucratic burden.
Finance Committee Amendments
On 12 November, the Finance Committee introduced amendments. These fully implement the OECD Safe Harbour requirements and clarify the role of the Federal Central Tax Office. A new rule establishes that the automatic exchange of minimum tax reports will begin on 1 January 2026. Other amendments aim to prevent double taxation of payments from intermediate companies and confirm that the exit tax remains even if taxpayers return to Germany after major profit distributions or repayments.
Bundesrat Feedback and Greens’ Motion
The Bundesrat suggested changes to the deduction of special business expenses. The federal government promised to review these proposals. The rejected Greens motion criticised corporate tax planning practices, arguing that loopholes and cross-border structures reduce effective taxation for Germany’s wealthiest business owners from 60% in 1996 to around 30% today. The Greens also opposed removing the licence barrier, which they said would allow companies to shift profits abroad via foreign subsidiaries.
Earlier, the German Ministry of Finance (MOF) published a draft ordinance setting out the rules for filing and exchanging the GloBE Information Return (GIR) on 29 September 2025.
