Germany
A. Progress in the implementation of the minimum standard
Germany has 94 tax agreements in force as reported in its response to the Peer Review questionnaire. Twelve of those agreements, comply with the minimum standard.
Germany signed the MLI in 2017 and deposited its instrument of ratification on 18 December 2020, listing 14 of its agreements in force at that time. The MLI entered into force for Germany on 1 April 2021. The agreements modified by the MLI come into compliance with the minimum standard once the provisions of the MLI take effect.
Germany reserved the right to delay the entry into effect of the provisions of the MLI until Germany has completed its internal procedures for this purpose with respect to each of its listed agreements.1 Germany has not yet notified that it completed its internal procedures for the entry into effect of the MLI with respect to any of its agreements.
Germany has not listed its agreements under the MLI with Albania, Argentina, Armenia, Belgium, Belarus, Bosnia-Herzegovina, Canada, China (People’s Republic of), Costa Rica, Côte d’Ivoire, Egypt, Georgia, Iceland, India, Indonesia, Israel, Jamaica, Kazakhstan, Kenya, Korea, Liberia, Malaysia, Mongolia, Montenegro, Morocco, Namibia, New Zealand, North Macedonia, Norway, Pakistan, Poland, Portugal, the Russian Federation, Serbia, Slovenia, South Africa, Sri Lanka, Switzerland, Thailand, Tunisia, Ukraine, Uruguay, Viet Nam and Zambia. These agreements will therefore not, at this stage, be modified under the MLI. Albania, Armenia, Bosnia-Herzegovina, China (People’s Republic of), Côte d’Ivoire, Egypt, India, Jamaica, Kazakhstan, Malaysia, Morocco, Mongolia, Namibia, New Zealand, North Macedonia, Pakistan, Portugal, Serbia, Thailand, Tunisia, Ukraine, Uruguay and Viet Nam have listed their agreements with Germany under the MLI.
Germany indicated in its response to the Peer Review questionnaire that steps have been taken (other than under the MLI) to implement the minimum standard in its agreements with Albania, Argentina, Armenia, Bangladesh*, Belgium, Bolivia*, Bosnia-Herzegovina, Canada, China (People’s Republic of), Costa Rica, Côte d’Ivoire, Ecuador*, Egypt, Iceland, India, Indonesia, Iran*, Israel, Jamaica, Kazakhstan, Kenya, Korea, Kosovo*, Kuwait, Liberia, Malaysia, Mongolia, Montenegro, Morocco, Namibia, New Zealand, Norway, Pakistan, Poland, Portugal, the Russian Federation, Serbia, Slovenia, South Africa, Sri Lanka, Switzerland, Thailand, Trinidad and Tobago, Tunisia, Ukraine, Uruguay and Viet Nam.
Germany has signed a bilateral complying instrument with respect to its agreements with Bulgaria, Latvia, Lithuania, Mexico2 and Sweden.
Germany indicated in its response to the Peer Review questionnaire that the agreement with Zambia does not give rise to material treaty-shopping concerns for Germany, noting the application of German domestic anti-abuse provisions such as Section 42 of the German Fiscal Code (GAAR) or in Section 50d para. 3 of the German Income Tax Act (anti-conduit rule), which permits the proportionate denial of tax treaty benefits to companies with non-eligible shareholders. Germany further indicated that the agreements with Azerbaijan, Belarus, Georgia, and North Macedonia do not give rise to material treaty-shopping concerns for Germany, because they contain a general reservation for the application of domestic anti-abuse provisions such as the two sections mentioned above and the CFC-legislation.
Germany is implementing the minimum standard through the inclusion of the preamble statement and the PPT.3
B. Conclusion
Albania, Armenia, Bosnia-Herzegovina, China (People’s Republic of), Côte d’Ivoire, Egypt, India, Jamaica, Kazakhstan, Malaysia, Morocco, Mongolia, Namibia, New Zealand, North Macedonia, Pakistan, Portugal, Serbia, Thailand, Tunisia, Ukraine, Uruguay and Viet Nam have listed their agreement with Germany under the MLI, which amount to requests to implement the minimum standard.
← 1. The reservation was made under Article 35(7)(a) of the MLI.
← 2. The bilateral complying instrument with respect to the agreement with Mexico entered into force on 6 August 2023.
← 3. For its agreements listed under the MLI, Germany is implementing the preamble statement (Article 6 of the MLI) and the PPT (Article 7 of the MLI). Germany has made a reservation pursuant to Article 6(4) of the MLI not to apply Article 6(1) of the MLI with respect to agreements that already contain the relevant preamble language (covering one agreement). Germany has also made a reservation pursuant to 7(15)(b) of the MLI not to apply Article 7(1) of the MLI with respect to agreements which already contain a PPT (covering one agreement).