The law amends the Minimum Tax Act to align it with the latest OECD Pillar 2 GloBE guidelines from December 2023, June 2024, and January 2025.
Germany’s Federal Cabinet approved the final draft legislation from the German Ministry of Finance to revise the Minimum Tax Act and introduce additional measures on 3 September 2025.
A change relates to the treatment of deferred taxes in the overall calculation that are not included in the minimum taxable annual profit or minimum taxable annual loss due to an election or offsetting.
Additionally, measures aim to reduce specific anti-profit shifting provisions to the necessary level, and minimising bureaucracy has been included. Other updates include income allocation in hybrid entity structures and safe harbour provisions.
The draft also aims to eliminate the license (royalty) barrier, establishing a minimum 10% holding requirement for CFC taxation on income with an investment character, and increasing exemption limits for CFC taxation of such income, among other measures.
Germany adopted the global minimum tax regulations through a law passed in December 2023.
Earlier, Germany’s Ministry of Finance released a draft law (Minimum Tax Adjustment Act) to amend the Minimum Tax Act, on 8 August 2025, to align it with the latest OECD Pillar 2 GloBE guidelines from December 2023, June 2024, and January 2025.