Global minimum tax: obligation to report group parents by the end of February 2025

The introduction of the global minimum tax will result in new obligations for large corporate groups. A central component is the group holding report, which will be relevant for the first time for the 2024 financial year. This article highlights the most important aspects that companies in Germany will have to consider in the future.

What is the purpose of the group parent report and who is affected by it?

The group parent report is used to determine the group parent that owes the minimum tax and files the minimum tax return for the entire minimum tax group.

Pillar 2 registration is mandatory for corporate groups that have generated group revenue of more than €750 million in at least two of the four preceding financial years. This size category was set to ensure that only large multinational corporations are affected by global minimum taxation.

Specifically, all business units belonging to a corporate group that are located in the country are subject to the tax. This means that smaller subsidiaries or operating units in Germany may also be subject to the reporting requirement if they are part of a group that exceeds the revenue threshold.

Deadline and transmission of the group parent report

The group parent report for the 2024 financial year must be submitted to the Federal Central Tax Office (BZSt) by 28 February 2025. An official form must be used for this purpose. The report is to be submitted electronically via the BZSt online portal.

The report can be made in the name of or on behalf of the ultimate parent company. The tax advisor of the group parent can also make the group parent report with the appropriate authorisation. The Federal Central Tax Office must be notified immediately of any changes in the group parent status.

Contents of the group parent report

The report includes the following main points:

• Information on the group parent and the ultimate parent company
  – name and address
  – tax number or alternative tax identification features
  – start of group activity
  – obligation form

• Contact details for a contact person at the transmitting company

• In the case of representation: name, address and proof of representation of the representative

Determining the group parent

The group parent is determined using a “top-down” approach:

• The ultimate parent company based in the country
• The common domestic parent company of all business units
• If the parent company is based outside the country: determination by this business unit or automatically the most economically significant domestic business unit.

Special features for subsidiaries

Subsidiaries are not required to submit their own group parent report if another group parent is required to submit a report. However, they should consult with the group parent to determine what additional reporting is needed.

Our recommendation

The group reporting requirement is an important new obligation under the global minimum tax regime. Companies should urgently check whether they are affected and take the necessary steps to fulfil the reporting requirement in a timely manner. It may be necessary to reconcile the accounts to the accounting standards of the parent company. Careful preparation and the support of tax and/or auditing experts can help to ensure that the process runs smoothly. We are happy to help!