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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Germany Second Round Review

This report for Germany has been published on 21 Aug 2017. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Stock companies and partnerships limited by shares created prior to 31 December 2015 can issue bearer shares. While some mechanisms are in place that require the owners of such shares to be identified, these are not in place for all bearer shares.   Germany should take necessary measures to ensure that appropriate mechanisms are in place to identify the owners of bearer shares in all instances. 
Beneficial ownership information is required to be collected by AML obligated persons, such as financial institutions, notaries, lawyers and accountants as part of their customer due diligence obligations. Limited liability companies are required to engage a notary for the issuance or transfer of shares. Other legal entities and arrangements are not required to have a relationship with an AML obligated person in Germany, although in practice many of them are likely to do so.   Germany should ensure that beneficial ownership information is available for all relevant entities and arrangements. 
Information on the monitoring and enforcement of some legal obligations concerning the maintenance of legal and beneficial ownership information was not available. As a result, their effectiveness in practice could not be fully ascertained.  Germany should enhance its system of oversight to ensure that legal and beneficial ownership information is available for all relevant entities and arrangements.  
Phase 2 Rating Factors Recommendations
Largely Compliant.     
   
   
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.   Banks are required to identify natural persons who ultimately own or control a trust as part of their customer due diligence measures. However, they are not required to identify all of the natural persons who are beneficiaries of a trust as only the beneficiaries of 25% or more of the assets or property of a trust must be identified in all instances.   Germany should ensure that banks are required to identify all of the beneficiaries (or class of beneficiaries) of trusts which have an account with a bank in Germany as required under the standard.  
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.   Eighteen EOI agreements entered into by Germany are not in line with the international standard.   Germany should continue to work with all its EOI partners to bring its existing exchange of information agreements in line with the standard. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.   While progress has been made, some of Germany’s partners still have pointed to delays in Germany’s processes to obtaining information and responding to requests. Some delays have also been observed in Germany’s responses to their EOI partners’ requests for clarification on Germany’s requests. The relationship with some EOI partners appeared to have suffered from lack of effective communication. Moreover, the various steps required in the EOI process appear to inhibit quicker response times.   Germany should examine how it could (i) speed up and ensure consistency in the processes for obtaining and providing information requested under EOI; and (ii) improve the communication with its EOI partners in relation to inbound and outbound EOI requests, including by providing timely responses to requests for clarification. 
Germany has not consistently provided status to all its treaty partners in relation to requests that cannot be replied within 90 days.   Germany should systematically provide an update or status report to its EOI partners in situations when the competent authority is unable to provide a substantive response within 90 days. 
Phase 2 Rating Factors Recommendations
Largely Compliant.