Minimum Tax Group Head: Centralisation of filing and payment obligations
The global minimum tax ("Pillar Two") applies for the first time to the financial year ending in 2024. Corporate groups subject to the minimum taxation face the dual challenge of complying with the safe harbour rules while also compiling the data required for full calculations. In addition to preparing the upcoming consolidated and annual financial statements, they must also perform preliminary tax calculations for provision purposes and disclosure in the notes. The Minimum Tax Group Head Notification Form must be submitted by 28 February 2025, right in the peak phase of preparing the financial statements.
Background
Expanding on Global Anti-Base Erosion (GLoBE) model rules, Sec. 3 of Germany's Minimum Tax Act (MinStG) introduces a unique provision that consolidates all filing and payment obligations for taxable (domestic) Constituent Entities of both domestic and foreign corporate groups into a single entity referred to the Minimum Tax Group Head (Gruppenträger). This aims to streamline the administration and collection of the minimum tax.
Determining the Minimum Tax Group Head
If the Ultimate Parent Entity is resident in Germany, it also has the position of the Minimum Tax Group Head. If it is not resident in Germany and there is a German Constituent Entity that is the joint parent of all other German Constituent Entities, this German Parent Entity is deemed to be the Minimum Tax Group Head. In cases where no such Parent Entity exists – for example, when a foreign Parent Entity comprises multiple legally independent divisions – the Ultimate Parent Entity assigns the position of Minimum Tax Group Head until further notice. If the Ultimate Parent Entity does not assign a Minimum Tax Group Head, the economically most significant Constituent Entity resident in Germany is deemed by law to assume this position. The determination therefore follows a top-down approach.
Official template for the Minimum Tax Group Head Notification Form published
The Minimum Tax Group Head Notification Form template (and the revocation of the Minimum Tax Group Head Notification Form) are now available for download on the Federal Central Tax Office's website. The Federal Ministry of Finance circular of 17 October 2024 (IV B 5 -S 1100/24/10001 :002) contains excerpts and provides assistance in completing the form.
Information to be provided
The Minimum Tax Group Head Notification Form includes the following information in particular:
- name and address of the Minimum Tax Group Head and the Ultimate Parent Entity;
- tax no. of the Minimum Tax Group Head and the Ultimate Parent Entity;
- information on the determination of the position as Minimum Tax Group Head;
- contact details of the filing entity's contact person;
- name and address of the representative if the notification is filed by a representative.
Obligation to transmit data electronically
The Minimum Tax Group Head must notify the Federal Central Tax Office of its position using the officially prescribed data set ('Gruppenträgermeldung nach § 3 Mindeststeuergesetz (MinStG) Pillar 2'), uploading it via the official online portal Federal Central Tax Office Online-Portal by 28 February 2025. The form is now available to download.
The previous or new Minimum Tax Group Head must report any subsequent changes or revocations without undue delay.
Short-term action required (possibly also abroad)
Corporate groups affected by the minimum tax should promptly check which Constituent Entity is designated as the Minimum Tax Group Head under Sec. 3 of the Minimum Tax Act or designate one. Options arise in this context for foreign minimum tax groups without a common Parent Entity of all Constituent Entities located in Germany.
Our experience shows that smaller domestic entities of foreign corporate groups in particular are dependent on input from the group tax departments in order to comply with minimum tax-specific requirements. Timely information is needed to indicate when action is required. At the group tax department level, it is crucial to consider the absence of uniform registration requirements and deadlines, as these vary from state to state.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
