The formation of a German tax group assumes that the parent company and the group`s company enter into a profit and loss management contract. The conditions for the recognition of such an agreement for German tax purposes have been changed several times over the past ten years, including the condition that the parent company must be held liable, in accordance with the agreement, for losses incurred by the group`s company, in which the group`s company is a German limited liability company (GmbH). Section 17 of the Corporate Income Tax Act (KStG) requires, in its most recent version, a dynamic reference to the legal provisions relating to loss liability, where the group`s company is a limited company (Aktiengesellschaft – AG), as stated in Section 302 of the Shares Act (AktG). In order to protect the tax status of existing German tax groups, the BMF did not, in a previous circular, question the tax treatment of such non-compliant profit and loss transfer contracts, provided they were concluded before 2004. On the other hand, a recent bundesfinanzhof (BFH) ruling of 10 May 2017 (reference I R 93/15) called this treatment into question by requiring that all profitable agreements concluded by Deutsche GmbH`s tax groups contain a dynamic reference to the provisions of paragraph 302 of the aktG concerning the acquisition of contractual losses. In accordance with the BMF circular, profit and loss transfer contracts that must expire before January 1, 2020 cannot be amended as noted above. The same applies to profit and loss transfer agreements, of which the group`s company is a German limited company. The PLTTs concerned include those that were closed before 1 January 2006 and do not contain references to the provisions of Article 302, paragraph 4, of the Act of 9 December 2004. These references may contain formulations such as .B. “Losses are covered in accordance with Article 302, paragraphs 1 to 3, of the act.” In 2004, Section 302 aktG was amended with the introduction of a new paragraph 4, which introduced a 10-year time limit for loss liability claims. Given that many profit-loss transfer contracts with The GmbH Group companies concluded before 2004 are only the text of the earlier version of Section 302 AktG (i.e.

without the new paragraph 4) or only in paragraph 302, margin. 1-3 aktG, they did not contain the new language according to the edge. 302, paragraph 4, of the nuG, and therefore did not correspond to paragraph 17 of the KStG (and also did not correspond to the earlier version of KStG point 17). Geme einem kurzlich ver-ffentlichten Abschreiben des Bundesfinanzministeriums (BMF) messen bestimmte Gewinn- und Verlustabf-hrungsvertr-ge (Ergebnisabf-hrungsvertr-ge), die von deutschen Steuerkonzernen genutzten und vor. January 31, 2004 was amended no later than December 31, 2019 to guarantee the benefits of the tax group (retroactive and future) (see circular BMF of April 3, 2019, IV C 2 – S 2770/08/10004).