18. August 2023
On 16 August 2023, the German Federal Government submitted the draft bill (government draft) of the Act Implementing the Directive (EU) 2022/2523 on Ensuring a Global Minimum Level of Taxation and further accompanying measures (Mindeststeuergesetz – MinStG).
The aim of the draft bill is to implement key elements of the international agreements on Pillar 2 of the so-called OECD BEPS two-pillar solution. The provisions contained therein are intended to ensure a global effective minimum taxation, to prevent harmful tax competition and aggressive tax structuring, and thus to contribute to the promotion of tax justice and a level playing field.
The draft bill also introduces amendments to the German Commercial Code. The amendments propose a mandatory exemption from accounting for deferred taxes in the annual and consolidated financial statements resulting from the application of the minimum tax law or corresponding foreign minimum tax laws (ref. section 274 (1) sentence 5, and section 306 sentence 5 HGB-E). This exception is based on the corresponding new IFRS requirements in IAS 12.4A. Furthermore, under the draft bill, additional disclosures are already provided for financial years ending 31 December 2023 (ref. section 285 No. 30a and section 314 (1) No. 22a HGB-E). In its comment letter on the draft bill published earlier this year by the Federal Ministry of Finance, the ASCG had recommended such a mandatory exemption from accounting for deferred taxes in connection with the legislation of the OECD BEPS Pillar 2 rules (we reported).
The press release and the draft bill can be downloaded from the Federal Ministry of Finance’s website.
Background: Council Directive (EU) 2022/2523 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union (Minimum Taxation Directive) was published in the Official Journal of the European Union on 22 December 2022 (OJ L 328/1 of 22 December 2022) (we reported) and is to be implemented by the EU Member States by 31 December 2023.
The ASCG is intensively examining the new rules on minimum taxation in its Technical Committees. The Financial Reporting Technical Committee and the Tax Working Group will discuss the accounting-relevant issues of the draft bill and examine the effects on accounting according to German Commercial Code and GAS 18.