Draft bill for the Annual Tax Act 2026 (JStG 2026)

The draft bill for the 2026 Annual Tax Act (JStG 2026) contains a large number of primarily technical adjustments. However, several clearly relevant key points emerge for the practical application of medium-sized companies, including those operating internationally. Even without a direct connection to transfer pricing, it is certainly an informative read.

The following is a structured, practice-oriented summary focusing on tax-relevant changes.

1. Income tax: Real estate, children, wage tax, withholding tax

1.1 New statutory purchase price allocation for real estate (§ 6f EStG)

Previously: Purchase price allocations between land and buildings were frequently a point of contention in tax audits, especially when using the BMF working aid.

New:

• Legal standardization of the division:
  • The contractual purchase price allocation shall be used as the basis. solange it does not fundamentally misrepresent the "real value relationships" and is economically sustainable.
  • If no usable contractual division exists, then:
    • To determine the land value according to ImmoWertV (§§ 40–43),
    • to apply a market-adjusted preliminary procedural value (comparative, income or asset value),
    • Building value = procedural value minus land value
    • Special object-specific characteristics (boG) are to be taken into account via surcharges/discounts.
• The BMF's working aid will be enshrined in law:
  • The Federal Ministry of Finance (BMF), in agreement with the federal states, publishes a working aid; the result of which "can" be used as a basis for taxation.
• Different allocation determined by expert opinion:
  • Taxpayers can prove a different allocation,
  • Required: Expert opinion from a publicly appointed and sworn expert or an expert certified according to DIN EN ISO/IEC 17024 with personal on-site inspection.

Consequences for companies:

• Much more Legal certainty at the depreciation basis.
• For larger transactions, it is worthwhile to early, expert-founded division concept (especially when there is a strong impact on depreciation and exit scenarios).
• For existing cases, Section 6f only applies to contracts concluded after its promulgation; existing divisions remain under the previous legal situation.

1.2 Child tax allowances and education allowance for EU/EEA children

Previously: For children residing abroad, tax allowances were generally reduced according to the cost of living in the country of residence.

New:

• EU/EEA children:
  • Tax allowances for children (§ 32 para. 6 EStG) and the education allowance (§ 33a para. 2 EStG) are unabridged Granted if the child resides in an EU/EEA state.
• Third-country children:
  • For children not residing in the EU/EEA, the reduction to the "necessary and appropriate" level there remains in effect.

Consequence:

• For internationally active executives with families in other EU/EEA countries, the tax relief can be significant. noticeably increase.
• Companies should consider the following when implementing expat and secondment models: net-oriented compensation planning to adjust.

1.3 Child benefit for EU/EEA/Swiss nationals (§ 62 para. 1a EStG)

• No more 3-month exclusion for non-working EU/EEA citizens and Swiss nationals.
• Child benefit entitlement exists if:
  • Residence/habitual abode in Germany and
  • Right to freedom of movement is present.
• Family benefits offices check freedom of movement independently; in case of doubt: review within one's own responsibility, notification to the immigration authorities in case of rejection or abuse.

Consequence:

• Priority for employers no direct tax, but rather a personnel and recruiting issue (attractiveness to EU professionals).
• In consulting practice: greater importance of Documentation of employment and residence status in the HR department.

1.4 Income tax: Data networking, certificates, wage replacement benefits

Expansion of the electronic wage tax certificate (§ 41b EStG):

• The list of certificates will be significantly expanded, including:
  • Detailed breakdown of:
    • Short-time work allowance, maternity allowances, compensation under the Infection Protection Act (IfSG), qualification allowance, etc., according to period and amount.
    • Reimbursed travel expenses and costs of maintaining two households (per type of expense and year),
    • employer-funded childcare, benefits from equity investments according to § 19a EStG,
    • Use of company cars (license plate letter D),
    • Tax-free income according to § 3 No. 21 EStG.
• Paper certificate is largely governed by a official electronic data set replaced.
• Correction deadline for payroll tax data: until End of February of the following year.

Lump sum allowance and tax exemption procedure:

• Employer or service provider:
  • The lump-sum allowance for preventive care will in future be paid to actual social security contributions withheld coupled (implementation from 2030).
• New: Possibility of a tax-free allowance in payroll tax deduction, among other things for:
  • Certain special expenses according to § 10 para. 1 no. 3 EStG (e.g. private health/long-term care insurance) for voluntarily insured persons, unless already taken into account via the allowance for precautionary expenses.

Consequence:

• For companies:
  • Significant adjustments are needed in payroll systems. (Data structures, interfaces, deadline management).
  • Payroll accounting is becoming increasingly important. Data provider for the assessment.
• For employees:
  • Tendency less rework in the income tax return,
  • However, more transparency regarding services received is needed.

1.5 Relief from withholding tax and procedural simplifications (§ 50c, § 50b, § 50e EStG)

Tax-free allowance according to § 50c para. 2 sentence 1 no. 2 EStG:

• Raising the tax-free allowance from the previous 10.000 euros to EUR 100.000 per taxpayer with limited tax liability and calendar year.
• Up to this limit, it is possible under certain conditions without application The tax deduction under Section 50a of the Income Tax Act (EStG) may be waived (especially license fees with relief under tax treaties).

Restrictions due to abuse:

• Holdings (≥ 10%) in shares held in collective or special custody:
  • Exemption procedure is excluded, in order to avoid designs (cum/cum-like).
  • Relief only in Reimbursement procedure with verification of actual eligibility.

Examination rights and fines:

• Section 50b of the Income Tax Act (EStG) becomes general examination law for relief cases (§§ 45b, 45c), especially at the Federal Central Tax Office (BZSt).
• Section 50e of the Income Tax Act is amended and expanded:
  • Administrative offense in the case of false, incomplete or late reports in the capital gains tax relief procedure.

Consequence:

• For companies that make license payments abroad:
  • Clear Reducing bureaucracy for smaller and medium payments, but
  • Due diligence obligations Documenting DBA requirements remains central.
• For capital market structures:
  • The administration's sharper focus on Design defense; important for treasury and holding structures.

2. Value Added Tax: Consignment warehouses, VAT grouping, digital economy

2.1 The consignment stock arrangement (§ 6b UStG) expires

• The EU-wide consignment stock arrangements are being phased out gradually:
  • Bis 30.06.2028: Application of Section 6b of the German VAT Act with transitional rules.
  • At the latest by 30.06.2029 All twelve-month periods end from 01.07.2029 Section 6b of the German VAT Act (UStG) has been repealed.
• Instead of this:
  • Use of the new OSS (One-Stop-Shop) regulations for certain cross-border deliveries.

Consequence:

• company with Call-off stock/consignment stock solutions in the EU:
  • their structure and registration strategy in a timely manner OSS and new location specifications adjust,
  • Rethink inventory flows, responsibilities, and reporting processes.

2.2 New regulations for VAT grouping (§ 2c UStG)

From 1 January 2029 (declarations possible from 1 July 2028) the organizational structure will be fundamentally redefined:

Key elements:

• Conditions for the offense remain:
  • Legal entity or partnership as a possible controlled entity,
  • financial, economic and organizational integration into a company of the controlling entity.
• Key innovation:
  • The legal consequences of a corporate body only take effect if the corporate body does so. declared to the tax office.
  • No more “unwanted” corporate bodies, but:
    • obligation to immediate notification, if the prerequisites cease to exist.
• Special regime for the unwinding of erroneously assumed organizational units:
  • Section 2c paragraphs 2–5 of the German VAT Act (UStG) regulates correction, interest, liability and waiver of reversal in the absence of tax losses.
• Procedure details in the VAT Implementing Regulation (new Section 1 VAT Implementing Regulation).

Consequence:

• For corporate structures (including medium-sized groups):
  • The organizational unit becomes a deliberate tax planning instrument with an obligation to explain.
  • Necessary: ​​Review of in which corporate constellations the organizational structure still applies advantageous is (cash flow/interest, input tax, compliance).
  • Higher formal costs, but better planning and less risk of "hidden" corporate structures.

2.3 Digital services, distance sales and thresholds (§ 3a, § 3c, § 3f VAT Act)

Section 3f of the German VAT Act (UStG) combines the previously separate threshold rules:

• Affected:
  • Telecommunications, broadcasting, television services and other electronically supplied services to non-entrepreneurs (§ 3a para. 5),
  • Intra-Community distance sales (§ 3c).

Key points:

• A uniform 10.000 euro threshold per year and company for certain cross-border B2C sales.
• Below the threshold: Place of performance/delivery is generally in country of domicile of the entrepreneur.
• Above / if waived: Place in Destination country, often using the OSS rules.
• Platform operators are sometimes treated like suppliers (§ 3 para. 3a UStG); here are clarifications and extensions.

Consequence:

• For e-commerce and digital business models:
  • A Clear transaction and revenue breakdown by country, in order to control thresholds and registration requirements.
  • OSS usage is effectively becoming Standard, to avoid multiple registrations.

2.4 Postal universal services (§ 4 No. 11b UStG)

• VAT exemption is linked to the updated EU legal concept of Universal services linked (Postal Act 2024).
• Only services that are exempt are under the approved universal service mandate fall
  • However, this does not include individually negotiated or "premium" services with differing conditions or prices.

Consequence:

• More indirectly relevant for companies (input VAT of postal service providers),
  • This is particularly relevant for price calculation of logistics and shipping services.

3. Tax Code and Procedural Law: Interest, Digitization, AI

3.1 Full interest (§ 233a, § 238 AO)

• interest rate:
  • until December 31, 2018: 0,5% p. M. (6% pa),
  • January 1, 2019–December 31, 2026: 0,15% p.a. M. (1,8% pa),
  • from January 1, 2027: 0,3% p. M. (3,6% pa).
• This applies uniformly to interest on additional payments and refunds.

Consequence:

• Higher interest rate incentive for Timely submission of declarations and advance payments.
• The importance of the interest component is increasing again in liquidity planning and in structuring (e.g. disputes with significant additional claims).

3.2 Electronic garnishment at credit institutions (§ 309a AO)

• Introduction of a Fully electronic account seizure:
  • Delivery via special electronic mailboxes of the credit institutions,
  • Electronic exchange of third-party debtor declarations.
• Goal: Digitization and acceleration of enforcement, Reduction of postage and printing costs.

Consequence:

• Particularly relevant for companies when Payment defaults:
  • Credit institutions react more quickly to garnishments,
  • Liquidity can be blocked in the short term.
• Important: consistent Payment and deadline management, in order to avoid enforcement risks.

3.3 Use of AI by tax authorities (§ 29c AO)

• Clarification that personal data is used for:
  • Development,
  • Examination,
  • Changes and ongoing operation of AI systems of the tax authorities They may be used if anonymization is disproportionate.
• Deletion periods are specified in more detail (usually within one year after the end of the measure).

Consequence:

• A clearly recognizable trend towards risk-oriented, data-driven operational audit.
• For companies this means:
  • Quality and consistency The reported data will become even more important (income tax, VAT, withholding tax, PStTG, FKAustG).
  • Noticeable deviations and patterns will identified more quickly.

4. International transparency and minimum taxation

4.1 Platform Tax Transparency Act (PStTG)

• Extension of the reporting and exchange regime to certain third countries, which have acceded to the multilateral Asunción Agreement.
• The reporting requirements for providers subject to reporting will in future include:
  • EU member states and selected third countries,
  • Extended obligations regarding identification numbers, currencies and reporting channels.
• Correction messages will be possible in the future bundled every six months .

Consequence:

• For platform operators, marketplaces and, where applicable, companies that operate their own platforms:
  • additional international reporting obligations,
  • The need for a robust Tax Compliance Frameworks in the area of ​​platform revenues.

4.2 Minimum Tax Act (MinStG) – Safe Harbor Regime

• Introduction of special safe havens:
  • Side-by-Side Safe Harbor (Section 81a MinStG):
    • The tax increase amount is reduced to zero if the ultimate parent company is based in a state with a recognized "side-by-side" taxation regime (high national and international tax rate, minimum tax integrated).
  • UPE Safe Harbor (§ 81b MinStG):
    • Relief for the state where the ultimate parent company is located, if a recognized UPE taxation regime exists.
• Expansion and extension of various transitional and safe harbor arrangements (e.g. CbCR-based).

Consequence:

• For large, multinational groups:
  • Planning security and simplifications when one lives in "recognized regimes".
  • Important, the Allocation and classification of tax jurisdictions to be closely monitored (the Federal Ministry of Finance's legal regulation lists the recognized jurisdictions).
• Medium-sized corporate groups bordering on minimum taxation should examine the following early on:
  • whether they fall within the scope of application,
  • whether safe harbors can be used.

5. Research Allowance (FZulG)

• Raising the state aid threshold:
  • Assessment basis increased from the previous 15 million euros to 25 million euros per project.
• Procedural mitigation:
  • If the application for certification is submitted within four years of the end of the relevant financial year,
    • The period for setting the allowance is running not before the expiry of two years after a legally binding certification decision.
  • Adjustment of the deadlines for revocation/amendment of the research allowance decision analogous to Section 170 Paragraph 3 AO, but with a two-year postponement.

Consequence:

• For research-intensive medium-sized companies:
  • Larger financial leeway per project.
  • Read More Safety in the chronological sequence of certificate and determination of allowances.
• Important: Set up internal processes in such a way that Project and cost documentation The entire term plus extension of the deadline is borne cleanly.

6. What should business leaders do now?

1. Review real estate and M&A strategy
   • Incorporate the new legal purchase price allocation for real estate into model calculations and contract drafting at an early stage.
   • For large transactions, possibly. Expert report plan on.
2. Adapt payroll and HR processes
   • Adjust payroll accounting in a timely manner to meet new data requirements and deadlines.
   • Update expat concepts and family benefits in the EU/EEA context (child tax allowances, child benefit framework conditions).
3. Review withholding tax and licensing structures
   • Take into account the exemption limits and anti-abuse rules under § 50a/50c EStG in license agreements, cash pooling and holding structures.
   • Strengthen documentation of eligibility for double taxation agreements and economic substance.
4. VAT group and consignment warehouses
   • Analyze organizational structures:
     • Where are corporate bodies desired?
     • What effects will the new disclosure requirements and the rules for reversing transactions have?
   • Adapt consignment stock solutions to the discontinued special regulation and new OSS structures.
5. Data quality and compliance
   • Due to increased AI and data analysis by the tax authorities:
     • Ensure data consistency between income tax, VAT, wage tax, withholding tax, PStTG and FKAustG.
     • Strengthen internal controls and documentation standards.
6. Identify affected international reporting obligations
   • Platform revenues, financial accounts, country-by-country reporting (CbCR), minimum taxation:
     • Clearly define responsibilities,
     • Update deadlines and reporting calendars.

This summary does not replace an individual case review. For internationally active medium-sized groups, it is worthwhile to systematically compare their own structures with the aforementioned changes and derive prioritized areas for action – particularly regarding real estate, withholding tax, VAT grouping, and the growing transparency and minimum tax regimes.