In order to combat international tax crime, the German Bundestag passed the Act to Combat Tax Avoidance and Unfair Tax Competition (Gesetz zur Abwehr von Steuervermeidung und unfairem Steuerwettbewerb, StAbwG) on 10 June 2021, which shall also strengthen tax revenue and increase tax fairness in Germany.

The aim is to make it more difficult for individuals and companies that maintain business relations with countries and territories that do not comply with internationally recognised standards in the area of taxation to avoid paying taxes. Measures to achieve this include stricter tax attribution rules, which make it unattractive for companies to transfer income to intermediate companies in tax havens. Operating expenses and income-related expenses associated with tax havens are also to be no longer deductible.  The new law is based on a European Union list, updated at least annually, of countries that consistently refuse to handle tax matters correctly.

Photo: Adobe Stock, joda

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