New ministerial draft bill to implement the amendments to the EU Mutual Assistance Directive and further measures against base erosion and profit shifting
In early June 2016, the Federal Ministry of Finance (Bundesfinanzministerium; "BMF") published a ministerial draft bill on the implementation of changes to the EU Mutual Assistance Directive and further measures against base erosion and profit shifting (the "Ministerial Draft Bill", "MDB"). The most relevant changes are summarized below.
The planned legislation is, in particular, intended to implement Action Item 13 (en-hancement of transparency) of the OECD BEPS-Project by introducing binding rules on "country-by-country reporting". Furthermore, the Ministerial Draft Bill pro-vides for the implementation in national law of the planned amendments to the EU Mutual Assistance Directive regarding the exchange of tax rulings. Moreover, the Ministerial Draft Bill contains a legislative proposal to change section 8b (7) of the German Corporate Income Tax Act (Körperschaftsteuergesetz; "KStG"), which is relevant for credit institutions, financial services institutions and financial enterpris-es, and measures to strengthen the German taxation right in certain cross-border situations. Special emphasis should be placed on the planned amendments to the German Trade Tax Act (Gewerbesteuergesetz, "GewStG"), which are intended to ensure that CFC income attributed to German resident taxpayers pursuant to sec-tion 10 of the German Foreign Transactions Tax Act (Außensteuergesetz; "AStG") and certain passive income derived by a German resident taxpayer from a foreign fixed place of business or a foreign partnership become subject to trade tax in Germany. However, the Ministerial Draft Bill does not contain any proposals for the implementation of further Action Items of the OECD BEPS-Project, in particular of Action Item 2 (hybrid mismatch arrangements). Such provisions are currently being discussed at EU level in connection with the so-called Anti-BEPS Directive.