German Credit Market Promotion Act Introduces Key Tax Changes

The German Bundestag has passed the Credit Market Promotion Act (Kreditzweitmarktförderungsgesetz), enacting several significant changes to tax legislation. The law, adopted after committee amendments, incorporates aspects of the previously stalled "Growth Opportunities Act" (Wachstumschancengesetz).

A primary amendment concerns the treatment of partnerships for real estate transfer tax. A new provision, effective until December 31, 2026, maintains the existing framework where partnerships are treated as a collective entity. This is a temporary measure to address conflicts arising from the upcoming reform of partnership law (MoPeG), which alters the separation of assets between partnerships and their partners. Furthermore, the act permanently establishes partnerships as collectively treated entities for income and gift tax purposes.

The legislation also reforms the interest deduction limitation rules (Zinsschranke) to align with the EU's Anti-Tax Avoidance Directive (ATAD). These updates impact the application of the stand-alone clause and the definition of net interest expense. The changes are applicable to fiscal years beginning on or after January 1, 2024.

Additionally, the act eliminates the taxation of December 2022 energy subsidies. The planned electronic data exchange between employers, tax authorities, and private health insurers regarding premium treatment has been postponed to January 1, 2026.