The German Ministry of Finance released a draft bill on 28 October 2016 about further measures taken to combat tax avoidance.

The main important details are summarised below:

-The bill provides for the introduction of an EU beneficial ownership register with respect to bank accounts and deposits. The tax administration will be authorised to request information to determine in which cases a resident taxpayer is a legal or economic owner of foreign bank accounts and deposits held by foreign individuals and foreign partnerships, companies, associations, and foreign funds (e.g. property foundations). This obligation to submit relevant data for the register applies to credit institutions, financial service providers, payment service providers and investment brokers.

-The statute of limitation period for tax evasion will be 10 years.

-From 1 January 2018, taxpayers will be obliged to state the purchase and sale of participations of at least 10%, or participations with a value of at least EUR 150,000, in foreign entities, associations and funds (e.g. property foundations). For the calculation of the 10% threshold, direct and indirect participations must be included. Furthermore, information must be provided on the activities of the relevant foreign entity, association, fund and foreign permanent establishment.

-From 1 January 2018, the above notification obligations also apply if a resident taxpayer obtains decisive influence on the business and financial activities of a company established in a third country. With respect to existing situations where taxpayers have such influence, a notification obligation arises where such influence still exists on 1 January 2018. In that case, a notification must be made in the corporate income tax return or income tax return, within 14 months after the end of the taxable period at the latest. This obligation, inter alia, applies to credit institutions, financial service providers, payment service providers and investment brokers.

-Mandatory notifications must be issued to the competent office of the tax administration before the end of February of the subsequent year.

-Individuals who have a decisive influence on a company are required to keep all relevant information, including information on income and expenses, for a period of 6 years.

-If taxpayers fail to meet the notification obligations, a penalty of up to EUR 25,000 may be imposed. If financial institutions fail to meet the notification obligations, a penalty of up to EUR 50,000 may be imposed.