Federal Cabinet has approved a draft bill to modernise tax consultancy law, expand advisory services, and update trade and real estate tax rules.
The German Federal Cabinet has approved a draft bill on 14 January 2026 to modernise the Tax Consultancy Law and update other tax rules, aiming to make tax advisory services more flexible for citizens and ensure fairer corporate taxation.
The draft legislation introduces four key changes in the area of tax advisory law:
- Comprehensive modernisation of regulations on wage tax assistance associations – Among other things, the monetary limits for activities that can be carried out in conjunction with wage tax assistance will be removed. This applies, for example, if a member of the association also earns income from rental and leasing. In addition, one person will in the future be allowed to manage three advisory offices instead of the previous two. According to estimates by the Federal Ministry of Finance (BMF), this change could allow approximately 35,500 additional taxpayers to benefit from a wage tax assistance association. This is expected to reduce the annual cost of tax advisory services by around EUR 10 million.
- New regulations on limited tax assistance – For example, energy consultants will be allowed to provide guidance on tax matters that relate to their advisory services.
- Expansion of the right to provide free tax assistance – In addition to close relatives, other persons with close ties will be allowed to provide advice free of charge. Moreover, so-called Tax Law Clinics at universities will be permitted.
- Removal of the management requirement for additional advisory offices of tax advisors – This means that an additional office can be operated without being managed by another tax advisor or requiring a special exemption.
In addition, the draft includes further tax measures:
- The coalition agreement’s planned increase of the minimum trade tax multiplier to 280% is intended to counteract companies relocating solely for tax reasons. Low multipliers have often encouraged companies to move their tax residence to such municipalities, even if they are not substantially active there.
- The draft also introduces amendments to the Real Estate Transfer Tax Act to prevent double taxation of the same transaction when the obligation (signing) and transfer (closing) occur at different times. In addition, the reporting period for parties under §19 of the Real Estate Transfer Tax Act is extended to one month.
The draft now moves to the Bundestag and Bundesrat for approval.
