Draft law created for share deal reform
The German Ministry of Finance presented the draft law on land transfer tax reform yesterday, containing the changes proposed by Germany’s state finance ministers – in particular the reduction of the relevant participation level from 95% to 90% and the increase of the five-year holding period to ten years – and creating planning security for all transactions that will be completed by December 31st, 2019. The old law remains applicable until then, according to Alexander Lehnen, partner at the law firm Arnecke Sibeth Dabelstein. Lehnen adds: “If a transaction is signed before the start of the legislative process – perhaps in June/July, or probably not until September – one can even close the transaction one year later under the old law.” There shall be transitional regulations as well. One of these is that the five-year period will still to apply to shareholders of a partnership, who are “old shareholders” as of 31 December 2019.
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