Clifford Chance
New RETT rules for share deals
20 May 2019
On 8 May 2019, the Federal Ministry of Finance has circulated a draft law to lobbying associations, inter alia, proposing several changes to the German Real Estate Transfer Tax Act ("RETTA") with regards to share deals. The cornerstones of this draft law are:
- Reduction of the threshold from currently 95% to 90%;
- Prolongation of the watching and holding periods from currently 5 years to 10 / 15 years; and
- Application of the partnership movement rule also to corporations.
The draft law provides that the new rules shall generally apply as of 1 January 2020 subject to certain grandfathering rules.
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