Germany: Legislature Responds To BFH Judgments Regarding Indirect Change Of Shareholders Under Sec. 1 Para. 2a German Land Transfer Tax Act ("GrEStG")

Last Updated: 9 March 2016
Article by Susan Günther
Most Read Contributor in Germany, September 2016

With the Tax Amendment Act of 2015, the legislature clearly rejected the view of the BFH that an economic perspective with reference to sec. 39 AO is crucial to the assessment of an indirect change of shareholders under sec. 1 para. 2a GrEStG. The revision instead codifies the view of the fiscal authorities. The extent of the indirect change of shareholders in a partnership company will be determined in future based on the legal form of the shareholders.


According to sec. 1 para. 2a GrEStG, the direct or indirect transfer of at least 95 percent of the shares of the partnership assets of a land-owning partner-ship to new shareholders is subject to land transfer tax payable within five years, since this constitutes a legal transaction aiming at the transfer of a property to a new partnership.

In relation to determining the transferred stake in the event of a direct transfer of shares in a land-owning partnership, there is no dispute between the fiscal authorities and case law that only a civil-law approach is applicable.

Case law takes a different view in the case of an indirect change of the shareholders in a land-owning partnership. Already in its judgment dated April 24, 2013 (II R 17/10) the BFH held that only an economic approach could be considered in the case of an indirect change of shareholders. This applies in-dependently of whether the shareholders of the land-owning partnership are corporations or partnerships. In its grounds for decision, the BFH particularly criticized the fact that the law does not include an explicit regulation of the extent that satisfies the conditions for an indirect change of shareholders under sec. 1 para. 2a (1) GrEStG, previous version. The BFH closed this discovered loophole with the above-described economic approach. The fiscal authorities responded to this judgment with a non-application decree.

Following up on the above judgment from 2013 with another judgment (II R 49/12) dated 9 July 2014, the BFH confirmed its view that only economic factors are decisive in examining a change of the indirect shareholders. The BFH further argued in the more recent judgment that only the principles of beneficial ownership under sec. 39 para. 2 (1) AO should be consulted for such an approach. According to the argumentation of the BFH, the crucial point for the allocation decision is whether firstly the purchaser achieves a legal position that can no longer be unilaterally withdrawn and further, whether and to what extent essential rights linked to the interest, as well as the risk of loss of value and the opportunity for appreciation of value for the interest, are passed on to a new shareholder.

The above-mentioned judgments of the BFH are extremely controversial in the literature. In particular, the prevailing view has been that sec. 39 para. 2 (1) AO is fundamentally not applicable in land transfer tax law. After all, the legislature deliberately struck the element "under economic considerations" from the wording of the act in the revision of sec. 1 para. 2a GrEStG dated 1 January 2010. Moreover the scope of the above-mentioned decisions is unclear. The literature has particularly discussed the question of whether and to what extent the principles set forth by the BFH are also applicable to the interpretation of the term indirect transfer of interest under sec. 1 para. 3 GrEStG and sec.1 para. 3a GrEStG.


Already after the BFH judgment of 2013 there were attempts by the legislature to make the regulations for indirect change of partners under sec. 1 para. 2a (1) GrEStG more specific. Not in keeping with an economic approach corresponding to the BHF's opinion, however, but drawing instead on the already existing application decrees of the fiscal authorities. The implementation failed in 2014 only because of the dispute over the permissibility of retroactive enforceability of the new supplementary regulations.

In light of the new and more extensive BFH decision from 2014, the German Bundesrat passed on 16 October 2015 the draft legislation for the Tax Amendment Act of 2015 ("StÄndG 2015"), which had been debated on second and third reading by the German Bundestag on 24 September 2015. The starting point for the now-passed StÄndG 2015 was the Act on Adaptation of the Tax Code to the Tariff Code of the Union and for Amending Further Fiscal Regulations of 22 December 2014. The revision is not retroactive, but rather comes into force on the date of proclamation of the StÄndG 2015. Since publication in the German Federal Gazette took place on 5 November 2015, the revision must now be applied to relevant transactions that have been and will be implemented after that date.

According to the StÄndG 2015, the existing legal regulation is extended as follows (abridged):

"Indirect changes of the shareholders of partnerships with interests in a partnership shall be taken into consideration by multiplication of the percentages of shares in the partnership assets [...] A directly participating corporation is considered a new shareholder in full, if more than 95 percent of the shares are transferred to new shareholders. [...]"

This supplemental legal regulation codifies the opinion held by the fiscal authorities and clearly rejects the economic approach of the BFH. The crucial fact in the future for the decision as to whether an indirect change of shareholders subject to sec. 1 para. 2a GrEStG, new version exists, will thus be whether the shareholders of the partnership are a partnership or a corporation.

If a partnership has a direct interest or if there is an indirect interest via multilevel partnerships, the respective equity interest conditions must be considered. Then there would be a calculated allocation.

In case an interest is held by a corporation, the prerequisites for an indirect change of shareholders are met if there is a direct or partially direct and partially indirect change of interest in the corporation of at least 95%. In case of a multilevel shareholding by corporations, the examination must be undertaken separately for each level of holdings. If the 95 percent limit is reached, then the indirect holding must considered in full (and not only in the amount of 95 percent).

If there is a mixed shareholding structure with corporations and partnerships, then the interests for partnership shareholders are calculated directly and the 95 percent limit must be considered on the level of corporate shareholders.


The taxpayer must now adjust back to the previously applicable opinion of the fiscal authorities and can no longer align investment decisions with the BFH decisions from 2013 and 2014. Since the legislature has currently forgone (the originally planned) retroactivity, acquisitions prior to the proclamation date of the StÄndG 2015 are fundamentally not subject to the new supplemental regulation and to that extent can rely on the BFH case law. The taxpayer should have future investment decisions fiscally reviewed and thus adjust to the conditions that prevail according to the StÄndG 2015.

Originally published 9 March 2016

Learn more about our Real Estate practice.

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2016. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.