Germany Approves Amendments to the Minimum Tax and DAC 9: Legal Implications for Businesses

At the end of December 2025, the German Federal Council (Bundesrat) formally approved a significant legislative package in the field of international tax law. The amendments concern the German implementation of the global minimum tax under the OECD framework (Pillar Two) as well as the introduction of DAC 9, a new mechanism for enhanced tax information exchange within the European Union.

For multinational groups operating in Germany, these developments represent a substantial shift. The new rules affect not only tax reporting obligations but also the legal structuring of cross-border business activities and ongoing tax compliance strategies.

The Global Minimum Tax (Pillar Two) in German Tax Law

The global minimum tax aims to ensure that large multinational enterprises pay a minimum effective tax rate of 15 percent in each jurisdiction in which they operate. While Germany has already implemented the core Pillar Two framework, the amendments adopted in December 2025 further refine its application under German law.

The changes primarily focus on clarifying the calculation of the effective tax rate, the treatment of intra-group transactions, and the interaction between the German domestic top-up tax and foreign minimum tax regimes. The legislator seeks to reduce legal uncertainty while aligning German practice more closely with EU-wide and OECD standards.

For companies, this means that existing tax calculation models and internal compliance procedures may need to be reviewed and adjusted. Simply applying OECD guidance without considering German-specific requirements is no longer sufficient.

DAC 9 and the Expansion of Tax Transparency in the EU

Alongside the minimum tax amendments, Germany has implemented DAC 9, the latest extension of the EU Directive on Administrative Cooperation. DAC 9 introduces a mandatory automatic exchange of GloBE information returns between EU tax authorities.

As a result, German tax authorities will gain access to detailed tax data submitted by multinational groups in other EU Member States, while German-filed information will be shared across the EU. This significantly increases transparency and reduces the scope for inconsistencies between national filings.

In practice, discrepancies in tax reporting, timing differences or structural inconsistencies within a group are more likely to be detected at an early stage, increasing the likelihood of coordinated tax audits.

Companies Most Affected by the New Rules

The amended rules primarily apply to multinational groups with consolidated annual revenues exceeding EUR 750 million. However, smaller entities may also be indirectly affected, particularly if they form part of an international group or operate as German subsidiaries within a broader corporate structure.

Holding companies, financing entities and businesses with complex cross-border profit allocation models are especially exposed to the new compliance and reporting requirements. For these companies, legal certainty in tax structuring becomes increasingly important.

Tax Risks and Legal Consequences

The main risk arising from the new framework lies not necessarily in higher tax payments, but in compliance failures. Incomplete, inconsistent or late filings may lead to additional tax assessments, penalties and more intensive scrutiny by the tax authorities.

Furthermore, the enhanced exchange of information means that tax disputes are more likely to have a cross-border dimension. Issues identified in one EU jurisdiction can quickly trigger follow-up actions in Germany.

Why Legal Advice Is Becoming Essential

The combination of the global minimum tax and DAC 9 illustrates a broader trend in international tax law: a move away from isolated national tax assessments towards a coordinated, multinational approach.

In this environment, effective tax planning requires close coordination between legal, tax and compliance functions. Early legal advice can help identify risks, align reporting systems and prevent disputes with the German tax authorities before they arise.

For companies operating in Germany, where tax audits are often legally complex and highly detailed, professional legal support is becoming a critical element of risk management.

Conclusion

With the amendments to the minimum tax and the implementation of DAC 9 adopted in December 2025, Germany has taken another decisive step towards greater tax transparency and harmonisation within the European Union. For internationally active companies, the legal and compliance requirements have become significantly more demanding.

Now is the right time to review existing structures and reporting processes to ensure compliance with the new legal framework and to mitigate potential legal and financial risks.