Germany has expanded the scope of its tax treaties covered under the Multilateral Instrument (MLI) through the Federal Tax Agreement Amendment Act 2026, significantly increasing the number of agreements subject to BEPS-related provisions and updating its reservations, notifications and dispute resolution rules.
Germany published the Act Amending the Act on the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) in the Official Gazette on 5 June 2026, expanding the scope of Covered Agreements (tax treaties) under the MLI framework.
The German Federal Tax Agreement Amendment Act 2026, dated 1 June 2026, updates Germany’s implementation of the Multilateral Convention of 24 November 2016, which introduces BEPS-related tax treaty measures. The Act primarily revises Germany’s selection decisions, reservations and notifications under the MLI.
A central feature of the legislation is a major expansion of Germany’s list of covered tax agreements, increasing the scope beyond the original 14 treaties by adding entries 15 to 76. This brings a broad range of additional treaties into the MLI framework, including agreements with key jurisdictions across Europe, the Americas, Asia-Pacific, and Africa/Middle East, such as the US, China, India, Japan, Canada and multiple EU and OECD partners.
The Act also introduces technical adjustments to align treaties with BEPS standards, including updated preamble language confirming the aim of preventing double taxation and non-taxation, notifications on dividend transfer provisions with reference to Article 10 of the US treaty, and provisions addressing permanent establishment avoidance through contract splitting under Article 14 of the MLI. Germany also issues a reservation under Article 10 of the MLI anti-abuse rule for third-state permanent establishments where equivalent safeguards already exist.
In addition, the legislation updates dispute resolution provisions. Germany maintains differentiated Mutual Agreement Procedure (MAP) filing deadlines across treaties and confirms its reservation from mandatory arbitration under Part VI of the MLI where existing arbitration mechanisms are in place, including treaties with Austria, France, Japan, Luxembourg and the US. Arbitration under the MLI will apply to treaties with Armenia and Canada.
The Act was passed by the Bundestag with the consent of the Bundesrat, issued in Bonn on 5 June 2026, signed by Federal President Frank-Walter Steinmeier, Chancellor Friedrich Merz, Finance Minister Lars Klingbeil and Foreign Minister Johann Wadephul, and entered into force on 6 June 2026.
