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April 1, 2021

German Ministry of Finance publishes final MDR guidance

Executive summary

On 29 March 2021, the German Federal Ministry of Finance (MoF) published the final decree providing guidance on the German Mandatory Disclosure Rules (MDR) legislation.

The body of the final decree includes only a few changes as compared to the latest draft, issued 14 July 2020 (For background on the initial draft, dated 3 March 2020, see EY Global Tax Alert, German Ministry of Finance publishes draft MDR guidance, dated 17 March 2020).

As the most apparent change, the final decree introduces a new appendix containing an indicative list of preferential tax regimes and a list of third-country jurisdictions which have been assessed by European Union (EU) Member States collectively or within the framework of the Organisation for Economic Co-operation and Development (OECD) as being non-cooperative (hallmark C1).

Detailed discussion


On 6 July 2020, the MoF announced that Germany would not defer the deadlines for filing and exchanging information on cross-border arrangements as allowed under EU Directive 2020/876 (see EY Global Tax Alert, Germany announces no postponement of MDR reporting deadlines, dated 8 July 2020). It was reported that a number of Ministries of Finance of the German federal states (Bundesländer) opposed this decision and thus refused to agree to the publication of a final decree at that time. Consequently, only an updated draft decree was published on the homepage of the Federal Central Tax Office (BZSt, the federal tax authority competent for the DAC6 reports and subordinated to the MoF) and it was announced that the BZSt would apply that draft.

After the end of the optional deferral period as set forth by EU Directive 2020/876, which had been used by most other EU Member States, the final decree was published on 29 March 2021. The final decree comprises 69 pages, plus two appendices and deals with the scope of the German MDR rules, the 15 hallmarks and the procedures for submission.

Changes compared to the latest draft guidance

Compared to the latest draft guidance issued 14 July 2020, the final guidance includes only a few changes. The appendix which names certain types of arrangements that are in principle not reportable (the “whitelist”) remains unchanged and still includes only a limited number of arrangements.

The final decree clarifies that the national provisions that form the basis of the reportable cross-border arrangement are not the German MDR rules, but the rules dealing with the tax consequences of an in Germany and any other EU Member State involved (e.g. the specific provisions of those Corporate Income Tax Acts). Further, the report must include the rules applying to the arrangement as well as the rules which are prevented from application due to the execution of the tax arrangement.

New appendix with preferential tax regimes and EU/OECD lists

The final decree includes a new appendix, published on the homepage of the BZSt on 30 March 2021, which contains an indicative list of preferential tax regimes and a list of third-country jurisdictions which have been assessed by EU Member States collectively or within the framework of the OECD as lacking transparency respectively considered as non-cooperative. Deductible cross-border payments made to associated enterprises where the payment benefits from a preferential tax regime or where the recipient is resident in such a non-cooperative jurisdiction may be reportable under the conditions of hallmark C1.

The list of preferential tax regimes includes the regimes reviewed by the OECD Forum on Harmful Tax Practices (FHTP) according to its latest November 2020 report, including the non-harmful regimes and the regimes under review such as United States (US) Foreign-Derived Intangible Income (FDII). The list also includes additional regimes not reviewed by the FHTP such as many Intellectual Property or patent box regimes. The list of preferential tax regimes is indicative: this means that the regimes listed do not necessarily satisfy hallmark C1(d), and also that regimes not listed might nonetheless qualify as preferential tax regimes within the meaning of the hallmark.

The list of third-country jurisdictions which have been assessed by EU Member States collectively reflects the latest EU Council’s list and includes the following 12 jurisdictions: American Samoa, Anguilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, US Virgin Islands, Vanuatu and Seychelles.

Different to other EU Member States, the MoF regards jurisdictions to be non-cooperative within the framework of the OECD which do not meet the OECD transparency standards. In the appendix, the BZSt refers to the OECD Progress Report to the G20 dated February 2020 and names Brunei Darussalam, Dominica, Niue, Sint Maarten and Trinidad and Tobago.1 According to the latest OECD Progress Report to the G20 (dated February 2021, p. 28) the following jurisdictions do not meet the transparency standards: Anguilla, Dominica, Niue, Sint Maarten and Trinidad and Tobago.

Next Steps

Determining whether there is a reportable cross-border arrangement raises complex technical and procedural questions for taxpayers and intermediaries. Taxpayers and intermediaries who have operations in Germany should review their policies and strategies for logging and reporting tax arrangements so that they are fully prepared for meeting these obligations within the tight 30-day deadline that is now applicable.


For additional information with respect to this Alert, please contact the following:

Ernst & Young GmbH

Ernst & Young LLP (United States), German Tax Desk, New York



  1. After the initial publication of this Alert on 1 April 2021, the BZSt updated the list of third-country jurisdictions which have been assessed within the framework of the OECD as being non-cooperative. The list now reflects the latest OECD Progress Report to the G20 (dated February 2021) and includes the following jurisdictions: Anguilla, Dominica, Niue, Sint Maarten and Trinidad and Tobago. This endnote was added to the Alert on 7 April 2021.

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


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