Pillar Two: Notification to be submitted by the end of February

Extensive obligations under the Minimum Tax Act

From 2024, corporate groups with a consolidated turnover of more than € 750 million will be subject to the global minimum tax (Pillar Two) in accordance with the German Minimum Tax Act (MinStG). The corporate groups subject to the global minimum tax are obliged to submit a group head notification, a GloBE Information Return and a minimum tax return in Germany for the first time for the financial year 2024.

While the minimum tax return for the financial year 2024 must be submitted by 30 June 2026 at the latest, the group head notification must be submitted two months after the end of the tax period. For the (same calendar) financial year 2024, it must therefore be submitted by 28 February 2025 at the latest.

As part of the group head notification, the group head must notify the Federal Central Tax Office (BZSt) of its status as a group head in accordance with Section 3 (4) sentence 1 MinStG. 

Determination of the group head

The group head is the constituent entity that is liable for the minimum tax and submits the minimum tax return for the entire minimum tax group. The minimum tax group includes all constituent entities (companies and permanent establishments) of a multinational group of companies located in Germany. A single constituent entity of a corporate group located in Germany also counts as a minimum tax group and group head. Who is the group head is determined in accordance with § 3 para. 3 of the Minimum Tax Act. 

• According to sentence 1 of this provision, the group head is generally the ultimate parent company if it is located in Germany. 
• If this is not the case, the parent company located in Germany is the group head if it is the common parent company of all constituent entities located in Germany (sentence 2).
• If sentences 1 and 2 do not apply, the ultimate parent company shall determine the group head in accordance with sentence 3.
• If the group head has not been determined, this is the constituent entity located in Germany that is the most significant in economic terms (sentence 4).

Procedure and reportable documents

The form provided by the BZSt must be used for the group head notification; this is submitted electronically via the BZSt online portal. The submission can be made both in the name of the (ultimate) parent company and on behalf of the parent company, e.g. by a tax advisor. In addition to the commencement of the group activity and the selection of the determining characteristic (Section 3 para. 3 MinStG), the following data must also be submitted:

• general data such as the name and address of the ultimate parent company,
• one of 4 possible tax identification characteristics of the ultimate parent company and
• the contact details of the contact person of the transmitting company. 

If the ultimate parent company and the group head are not identical (Section 3 (3) sentences 2, 3 or 4 MinStG), the aforementioned data must also be provided for the group head. In the case of representation, details of the representative and a power of attorney must also be submitted.

Inbound cases also affected

Even if many details on the application and implementation of the Minimum Tax Act have not yet been conclusively clarified, the first legal obligations will have to be fulfilled in the coming weeks. The group head notifications do not only affect cases in which the ultimate parent company is located in Germany. Affected groups of companies with a foreign head office must also submit these reports. We will be happy to support you and advise you on all questions relating to the global minimum tax.