New Legislation on RETT Blocker Structures


For some time now legislative bodies have been discussing the implementation of rules according to which the acquisition of “economic” (wirtschaftliche) participating interests of more than 95 % on a consolidated basis in a company or partnership holding real estate shall, in future, be subject to real estate transfer tax. The aim is to “combat” holding structures which, up until now, have enabled the acquisition of such holding structures without triggering real estate transfer tax (so-called RETT-blocker-structures).

In the course of the legislative procedure to implement the Mutual Assistance Directive and to amend other tax regulations (Amtshilferichtlinie-Umsetzungsgesetz – AmtshilfeR-LumsG), the Conciliation Committee (Vermittlungsausschuss) of the German Parliament (Bundestag) and the German Federal Council (Bundesrat) in its meeting on 5 June 2013 agreed to include in the proposed bill inter alia provisions to combat such acquisition structures. The German Parliament in its meeting on 6 June 2013 and the German Federal Council in its meeting on 7 June 2013 approved these provisions and, by doing so, resolved the long-running dispute between the legislative bodies.

The new section 1 paragraph 3a of the Real Estate Transfer Act – which will now become law – is identical to the proposed bill which had already been under consideration for months. Our October 2012 Tax Alert discussed proposed bill and its associated implications.

Please see full alert below for more information.

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