Executive summary

On 17 October 2024, the German Ministry of Finance (MoF) published the Minimum Tax Group Head Notification Form, a concept specific to the German Minimum Taxation Rules which centralizes top-up tax payments and filing obligations at level of one single Constituent Entity, the Minimum Tax Group Head.

The first-time notification deadline is 28 February 2025 for multinational enterprise groups (MNE Groups) with a financial year that is equal to the calendar year; notification will likely be possible from 2 January 2025, according to the announcement. For MNE Groups with a financial year that is different from the calendar year, the first notification deadline is 28 February 2026 for most cases.

Detailed discussion

For Minimum Tax purposes, Germany introduced a Minimum Tax Group concept ("Mindeststeuergruppe"), which aggregates all top-up taxes to be paid by German Constituent Entities under the Income Inclusion Rule (IIR), Undertaxed Profits Rule (UTPR) and Qualified Domestic Minimum Top-up Tax (QDMTT) at level of one single entity, the Minimum Tax Group Head ("Gruppenträger"). The concept is specific for Germany and is not covered by the Organisation for Economic Co-operation and Development (OECD) Model Rules or the European Union (EU) Directive 2022/2523 on ensuring a global minimum level of taxation. For administrative simplification purposes, the Minimum Tax Group Head is obliged to file the German Minimum Tax Return and pay the German top-up tax on behalf of all other German Constituent Entities. The rules stipulate a mandatory recharge of the top-up tax within the Group as well as joint liability.

Under the current law (as of October 2024), the concept is relevant for all MNE Groups falling under Pillar Two with at least two Constituent Entities (including permanent establishments) located in Germany and notwithstanding whether there is a direct parent-subsidiary relationship between the German Constituent Entities. However, it should be noted that under recent draft legislation ("Jahressteuergesetz 2024") the notification requirement shall also be extended to groups with just one Constituent Entity located in Germany. It is expected that this change will become law this year, so the same deadlines are expected to apply for MNE groups with at least two Constituent Entities located in Germany.

If the ultimate parent entity (UPE) is resident in Germany, the UPE also has the position of the Minimum Tax Group Head. If the UPE is not resident in Germany and there is a German Constituent Entity that is the direct or indirect joint parent of all other German Constituent Entities, this German parent entity is deemed to be the Minimum Tax Group Head. In all other cases, the UPE of the MNE Group can assign the position of Minimum Tax Group Head to any German Constituent Entity. If the UPE does not assign the Minimum Tax Group Head position, the "economically most significant" entity is deemed to be the Minimum Tax Group Head.

The Minimum Tax Group Head must electronically notify to the German Federal Central Tax Office ("BZSt") and include, among other things, the following information:

• Name and address of the Minimum Tax Group Head and the UPE — information regarding other Constituent Entities is not required
• Tax number of the Minimum Tax Group Head and the UPE
• Information on the determination of the position as Minimum Tax Group Head
• Contact data for the filing entity's contact person
• Name and address of a representative if the notification is filed by a representative (e.g., a tax advisor)

The notification is due within two months from the end of the calendar year in which the Group falls within the scope of the German Minimum Tax Act. If the financial year of the MNE Group is equal to the calendar year, the first-time notification is due on 28 February 2025. If the financial year is different from the calendar year, the first-time notification deadline is 28 February 2026, except in cases with a short financial year ending before 1 January 2025. Changes in the position as Minimum Tax Group Head need to be reported immediately. Electronic filing has been announced to be possible starting on 2 January 2025.

The full text of the form is available on the MoF website and may be accessed directly here.