Since November 1, 2008, according to Art. 16 of the German Private Limited Companies Act (GmbHG), the list of shareholders in the Trade Register has been upvalued. Since then, it has been regarded as the basis of legitimacy for the exercise of shareholder rights and as a starting point for the good faith acquisition of shares.
However, incorrect or old shareholders lists are still to be found in the Trade Register. As a result, shareholders' resolutions may become void, profit-sharing rights may be disputed, or even share transfers may be declared invalid. These inaccurate lists, therefore, represent a considerable potential for liability risks for the company, the shareholders, and the managing director(s).

NEW: the duty to report foreign investments is extended to naming the commercial activity of the investee.
Until recently, according to Art. 138 of the German Fiscal Code the taxpayer had to report investments in non-German corporations or private companies to the tax office only if the investment – a direct or an indirect one –
a) reaches 10% or more AND
b) amounts to at least 150.000 EUR.
Now, the COMMERCIAL ACTIVITY OF THE INVESTEE must ALSO be reported to the tax office, that is – it has to be included in the tax declarations (income tax and corporation tax). This must be disclosed to the tax office within 14 months after the investment had been realised or after the participation limit had been reached. This deadline is not prolongable. A failure to comply with this reporting regulation constitutes an administrative offence, which can be fined up to 25.000 EUR.

​In the case of debit taxation, the entrepreneurs in Germany have to pay VAT to the tax office as soon as they have written the invoice – even if the customer pays later – what is, until now, an unconditional obligation for the entrepreneurs to pre–finance the VAT.
The German Federal Fiscal Court has now expressed doubts about the continuation of the existence of this obligation without any restriction, since it might be contrary to binding requirements of the law of the European Union. For topical reasons, the German Federal Fiscal Court has sent a preliminary ruling request to the European Court of Justice (Bundesfinanzhof, ruling of 21.06.2017 – V R 51/16, published on 20.09.2017). 

​In September 2017, for the first time, Germany carried out the automatic exchange of financial account information with 49 other countries from all over the world. In the fight against cross-border tax fraud and tax evasion, closer cooperation between the national tax authorities is indeed essential. More than 100 countries and territories have currently registered for the automatic exchange of financial account information. The next data exchange, which is expected to involve additional countries and territories, is scheduled for September 2018.
The automatic exchange of financial account information is the systematic and regular transfer of strictly defined tax information – Common Reporting Standard – on certain types of income at a fixed time between states and territories.
As a result, the German tax authorities are now most extensively informed about foreign income generated by most taxpayers.

​New and extremely important for corporations:
the current limitation of the loss deduction after a change of a shareholder – of more than 50% of the company shares –  is now as well subject to review on grounds of possible unconstitutionality.

At the end of March this year, the German Federal Constitutional Court already ruled (step 1) that the regulation of the loss deduction after a change of shareholder(s)(1) - of more than 25% and up to 50% of the company shares - violates the Constitution.(2) Under the old regulation, the loss carryforward of a corporation ceased partially to apply if within 5 years there had been a transfer of 25% to 50% of company shares (harmful acquisition of shares). At the same time, the German Federal Constitutional Court ruled that the correction of this regulation should come into effect by the end of 2018. Simply put this means that shortened loss carryforwards made since January 2008 are now being reviewed by the tax office and will possibly be changed.