# German — Taxes Sub-Lexicon

German tax-law terminology mapped to the neutral English equivalents in
`references/taxes.md`. German tax law is governed primarily by the
Abgabenordnung (AO — General Tax Code), the Einkommensteuergesetz (EStG — PIT),
the Körperschaftsteuergesetz (KStG — CIT), the Umsatzsteuergesetz (UStG — VAT),
the Gewerbesteuergesetz (GewStG — trade tax), and a body of special acts
(Umwandlungssteuergesetz, Außensteuergesetz, etc.). For corporate / M&A context
use alongside `german-corporate-ma-jv.md`.

---

## 1. Headline Taxes (Steuern)

| German | English |
|---|---|
| Körperschaftsteuer (KSt) | corporate income tax (KSt) |
| Einkommensteuer (ESt) | personal income tax (ESt) |
| Lohnsteuer | wage tax (PAYE on employment income) |
| Kapitalertragsteuer (KapESt) | capital income withholding tax |
| Abgeltungsteuer | final flat-rate withholding on investment income (25%) |
| Solidaritätszuschlag (Soli) | solidarity surcharge (Soli — 5.5% of KSt/ESt) |
| Gewerbesteuer (GewSt) | trade tax (GewSt — municipal) |
| Umsatzsteuer (USt) | value added tax / turnover tax (USt = VAT) |
| Mehrwertsteuer (MwSt) | value added tax (MwSt = VAT — common label) |
| Einfuhrumsatzsteuer (EUSt) | import VAT |
| Grunderwerbsteuer (GrESt) | real estate transfer tax (GrESt) |
| Grundsteuer | real estate tax (annual — municipal) |
| Erbschaftsteuer / Schenkungsteuer | inheritance tax / gift tax |
| Kirchensteuer | church tax |
| Versicherungsteuer | insurance premium tax |
| Kraftfahrzeugsteuer (Kfz-Steuer) | motor vehicle tax |
| Verbrauchsteuern | excise duties |
| Energiesteuer | energy tax |
| Stromsteuer | electricity tax |
| Tabaksteuer | tobacco tax |
| Alkoholsteuer / Branntweinsteuer | alcohol / spirits tax |
| Zölle | customs duties |
| Rennwett- und Lotteriesteuer | betting and lottery tax |
| Finanztransaktionssteuer | financial transaction tax (FTT) |
| Digitalsteuer (geplant) | digital services tax (DST — proposed) |

## 2. Direct Taxes — KSt / ESt Concepts

| German | English |
|---|---|
| zu versteuerndes Einkommen | taxable income |
| steuerbilanzielles Ergebnis | tax-balance-sheet result |
| handelsbilanzielles Ergebnis | commercial-balance-sheet result |
| Maßgeblichkeitsprinzip | authoritative-principle rule (commercial balance sheet is authoritative for tax, subject to overrides) |
| Betriebsausgaben | business expenses |
| Werbungskosten | income-related expenses (employees, investment income) |
| Sonderausgaben | special expenses (deductions from ESt base) |
| außergewöhnliche Belastungen | extraordinary burdens (hardship deductions) |
| Abschreibung (AfA) | depreciation / amortization |
| lineare / degressive AfA | straight-line / declining-balance depreciation |
| Sonderabschreibung | special depreciation (tax-only) |
| Rückstellungen | provisions / accruals |
| Teilwertabschreibung | partial-value write-down |
| Körperschaftsteuersatz (15%) | KSt rate (15%) |
| Solidaritätszuschlag (5,5% auf KSt) | solidarity surcharge (5.5% of KSt) |
| effektive Gesamtsteuerbelastung (ca. 30%) | effective total corporate tax burden (ca. 30% including trade tax) |
| Gewerbesteuermesszahl / Hebesatz | trade tax base rate / municipal multiplier |
| Gewerbesteueranrechnung | trade tax credit (for sole traders and partnerships — Art. 35 EStG) |
| Verlustvortrag | loss carry-forward |
| Verlustrücktrag | loss carry-back |
| Mindestbesteuerung | minimum taxation (limit on loss offset beyond €1m) |
| Mantelkauf / schädlicher Beteiligungserwerb | shell acquisition / detrimental share acquisition (Art. 8c KStG — loss forfeiture on >50% share transfer) |
| Sanierungsklausel | restructuring clause (loss preservation, Art. 8c KStG) |
| fortführungsgebundener Verlustvortrag | continuation-linked loss carry-forward (Art. 8d KStG) |
| Organschaft | fiscal unity / tax group (Organschaft) |
| Organträger | controlling entity of the fiscal unity |
| Organgesellschaft | controlled entity of the fiscal unity |
| Gewinnabführungsvertrag (GAV) | profit-and-loss transfer agreement (required for Organschaft) |
| Beteiligung / Schachtelprivileg | participation exemption (Schachtelprivileg) |
| Freistellung von Dividenden (§ 8b KStG) | dividend exemption (Art. 8b KStG — 95% exempt, 5% non-deductible addback) |
| Veräußerungsgewinne auf Beteiligungen (§ 8b KStG) | capital gains on shareholdings (95% exempt) |
| Zinsschranke | interest limitation rule (30% EBITDA — Art. 4h EStG / Art. 8a KStG) |
| Lizenzschranke | royalty limitation rule (Art. 4j EStG) |
| Hinzurechnungsbesteuerung (§§ 7-14 AStG) | CFC rules (add-back taxation, Foreign Tax Act §§ 7–14) |
| Wegzugsbesteuerung (§ 6 AStG) | exit tax for individuals (Foreign Tax Act § 6) |
| Außensteuergesetz (AStG) | Foreign Tax Act (AStG) |
| Forschungszulage | R&D allowance (since 2020) |

## 3. USt / MwSt (VAT)

| German | English |
|---|---|
| Unternehmer | taxable person (trader) |
| Lieferung | supply of goods |
| sonstige Leistung | supply of services |
| steuerbarer Umsatz | taxable turnover |
| steuerpflichtiger Umsatz | taxable (non-exempt) supply |
| steuerfreier Umsatz | exempt supply |
| innergemeinschaftliche Lieferung | intra-Community supply |
| innergemeinschaftlicher Erwerb | intra-Community acquisition |
| Einfuhr | importation |
| Ausfuhr | exportation |
| Reverse-Charge-Verfahren / Steuerschuldnerschaft des Leistungsempfängers | reverse charge mechanism |
| Vorsteuer | input VAT |
| Umsatzsteuer-Voranmeldung | periodic VAT return |
| Umsatzsteuer-Jahreserklärung | annual VAT return |
| Steuersatz | tax rate |
| Regelsteuersatz (19%) | standard rate (19%) |
| ermäßigter Steuersatz (7%) | reduced rate (7%) |
| Nullsteuer | zero rate |
| Rechnung | invoice |
| elektronische Rechnung (E-Rechnung) | electronic invoice (mandatory B2B phase-in from 2025) |
| Umsatzsteuer-Identifikationsnummer (USt-IdNr.) | VAT identification number |
| Zusammenfassende Meldung (ZM) | recapitulative statement (EC Sales List) |
| Intrastat-Meldung | Intrastat declaration |
| OSS / IOSS | One Stop Shop / Import One Stop Shop |
| Kleinunternehmerregelung | small-business scheme (VAT exemption below threshold) |
| Ist-Besteuerung / Soll-Besteuerung | cash-basis / accrual-basis VAT |
| Steuerbefreiung mit Vorsteuerabzug | exemption with input VAT recovery (zero-rated) |
| Steuerbefreiung ohne Vorsteuerabzug | exemption without input VAT recovery |

## 4. Withholding Taxes and Cross-Border

| German | English |
|---|---|
| Quellensteuer | withholding tax (WHT) |
| Kapitalertragsteuer | capital income withholding tax |
| Abgeltungsteuer (25% + Soli) | final flat-rate withholding on investment income |
| Lohnsteuerabzug | wage tax withholding (employment PAYE) |
| Bauabzugsteuer | construction withholding tax (15% on construction services — Art. 48 EStG) |
| § 50a EStG-Abzug | withholding on certain income paid to non-residents (artists, sportspeople, licensors) |
| wirtschaftlicher Eigentümer / Nutzungsberechtigter | beneficial owner |
| Ansässigkeitsbescheinigung | certificate of tax residence |
| Doppelbesteuerungsabkommen (DBA) | double tax treaty (DTT) |
| Mutter-Tochter-Richtlinie | Parent-Subsidiary Directive |
| Zins- und Lizenzgebühren-Richtlinie | Interest and Royalties Directive |
| Freistellungsbescheinigung | exemption certificate (for WHT relief at source) |
| Erstattungsverfahren | refund procedure |

## 5. Tax Residency, PE and Source

| German | English |
|---|---|
| steuerliche Ansässigkeit | tax residency |
| unbeschränkte Steuerpflicht | unlimited tax liability (worldwide income) |
| beschränkte Steuerpflicht | limited tax liability (German-source income only) |
| erweitert beschränkte Steuerpflicht | extended limited liability (former residents, Art. 2 AStG) |
| Wohnsitz | residence (place of abode, Art. 8 AO) |
| gewöhnlicher Aufenthalt | habitual abode (Art. 9 AO — >6 months) |
| Sitz | registered seat (Art. 11 AO) |
| Ort der Geschäftsleitung | place of effective management (Art. 10 AO) |
| Betriebsstätte | permanent establishment (PE) — Art. 12 AO / treaty |
| feste Geschäftseinrichtung | fixed place of business |
| ständiger Vertreter | dependent agent (permanent representative) |
| Bau- und Montagebetriebsstätte | construction and installation PE |
| Dienstleistungsbetriebsstätte | services PE |
| Wegzugsbesteuerung | exit tax (individual, Art. 6 AStG) |
| Entstrickung / Verstrickung | unbinding / binding (tax deferral on transfers into / out of German tax sphere) |

## 6. Transfer Pricing and Anti-Avoidance

| German | English |
|---|---|
| Verrechnungspreise | transfer prices |
| Fremdvergleichsgrundsatz | arm's length principle |
| verbundene Unternehmen | related undertakings |
| Preisvergleichsmethode | comparable uncontrolled price method |
| Wiederverkaufspreismethode | resale price method |
| Kostenaufschlagsmethode | cost-plus method |
| geschäftsvorfallbezogene Nettomargenmethode | transactional net margin method (TNMM) |
| Gewinnaufteilungsmethode | profit split method |
| Verrechnungspreisdokumentation | transfer pricing documentation |
| Master File / Local File | master file / local file |
| länderbezogener Bericht / Country-by-Country Report | country-by-country report (CbCR) |
| Verrechnungspreisvorabverständigung (APA) | advance pricing agreement (APA) |
| verdeckte Gewinnausschüttung (vGA) | constructive / deemed dividend distribution (vGA) |
| verdeckte Einlage | constructive / deemed capital contribution |
| Funktionsverlagerung | relocation of functions (transfer of business functions) |
| Transferpaket | transfer package (bundle of functions, risks, assets for TP valuation) |
| Hinzurechnungsbesteuerung (AStG) | CFC taxation (Foreign Tax Act) |
| Niedrigbesteuerung | low taxation (threshold for CFC — currently <15%) |
| passive Einkünfte / aktive Einkünfte | passive income / active income |
| Missbrauchsvorschrift (§ 42 AO) | general anti-avoidance rule (Art. 42 AO) |
| rechtsmissbräuchliche Gestaltung | abusive arrangement |
| wirtschaftliche Betrachtungsweise | economic substance-over-form approach |
| Zwischenschaltung | interposition (anti-conduit context) |
| Treaty-Shopping / Gestaltungsmissbrauch | treaty shopping / arrangement abuse |
| Anti-hybride Regelungen (§ 4k EStG) | anti-hybrid rules (ATAD II) |
| Zinsschranke (30% EBITDA) | interest limitation (30% EBITDA, Art. 4h EStG) |
| Freigrenze (3 Mio €) | safe harbor threshold (€3m) |
| Stand-alone-Klausel / Eigenkapitalklausel | stand-alone / equity-escape clause |
| Pillar 2 / Mindestbesteuerungsgesetz (MinBestG) | Pillar Two / German Pillar Two Act (MinBestG) |
| Ergänzungssteuer | top-up tax (Pillar Two umbrella) |
| primärer / sekundärer / nationaler Ergänzungssteuer | IIR / UTPR / QDMTT |

## 7. Tax Procedure and Compliance

| German | English |
|---|---|
| Steuererklärung | tax return |
| elektronische Steuererklärung (ELSTER) | electronic tax return (ELSTER portal) |
| Steuervorauszahlung | advance tax payment / installment |
| Steuerbescheid | tax assessment notice |
| Steuerfestsetzung | tax assessment / determination |
| Festsetzungsfrist | assessment period (time limit — general 4 years, 10 for evasion) |
| Zahlungsverjährung | collection limitation (5 years) |
| Anlaufhemmung | delayed start of the limitation period |
| Berichtigung | correction / amendment |
| Einspruch | administrative appeal (within 1 month) |
| Aussetzung der Vollziehung (AdV) | stay of enforcement |
| Säumniszuschlag | late-payment surcharge (1% per month) |
| Verspätungszuschlag | late-filing surcharge |
| Zinsen auf Steuernachforderungen (§ 233a AO) | interest on tax back-payments (6% p.a. — reduced to 1.8% after BVerfG ruling) |
| Hinterziehungszinsen | evasion interest |
| Geldbuße | administrative fine |
| Steuerstrafverfahren | criminal tax proceedings |
| Steuerhinterziehung (§ 370 AO) | tax evasion (Art. 370 AO) |
| Selbstanzeige (§ 371 AO) | self-report / voluntary disclosure with exculpating effect |
| Betriebsprüfung | field audit |
| Außenprüfung | external audit |
| Prüfungsanordnung | audit order |
| verbindliche Auskunft | binding ruling (§ 89 AO) |
| verbindliche Zusage nach Außenprüfung | binding assurance after audit |

## 8. Tax Authorities and Litigation

| German | English |
|---|---|
| Finanzamt | local tax office (Finanzamt) |
| Bundeszentralamt für Steuern (BZSt) | Federal Central Tax Office (BZSt — handles WHT relief, rulings, exchange of information) |
| Oberfinanzdirektion (OFD) | Regional Finance Directorate (phased out in some Länder) |
| Bundesministerium der Finanzen (BMF) | Federal Ministry of Finance (BMF) |
| BMF-Schreiben | BMF circular (administrative guidance) |
| BFH (Bundesfinanzhof) | Federal Fiscal Court (BFH — highest tax court) |
| Finanzgericht (FG) | Fiscal Court (first instance for tax litigation) |
| Einspruchsentscheidung | decision on administrative appeal |
| Klage vor dem Finanzgericht | claim / action before the Fiscal Court |
| Revision zum BFH | revision / appeal to the BFH |
| Nichtzulassungsbeschwerde | complaint against non-admission (of revision) |
| Aussetzungsantrag | stay application |
| Zolldienststellen / Hauptzollamt | main customs offices |

## 9. M&A and Reorganization Tax Interface

For full M&A drafting terminology see `german-corporate-ma-jv.md`. The terms below
are the substantive tax concepts that recur in deal documents.

| German | English |
|---|---|
| Share Deal / Anteilskauf | share deal |
| Asset Deal / Einzelwirtschaftsgüter-Kauf | asset deal |
| Übertragung eines Betriebs / Teilbetriebs | transfer of a business / part of a business |
| Sacheinlage | contribution in kind |
| Einbringung | contribution (of a business or shareholdings) |
| Umwandlung | corporate conversion (umbrella for reorganizations) |
| Verschmelzung | merger |
| Spaltung | demerger / split |
| Aufspaltung | full demerger (company ceases to exist) |
| Abspaltung | split-off / partial demerger (company continues) |
| Ausgliederung | spin-off (transfer to newly-formed subsidiary for shares) |
| Formwechsel | change of legal form |
| Umwandlungssteuergesetz (UmwStG) | Reorganization Tax Act (UmwStG) |
| steuerneutrale Umwandlung | tax-neutral reorganization |
| Buchwertfortführung | carry-over at book values |
| Zwischenwertansatz | interim-value election |
| Teilwertansatz / gemeiner Wert | fair-value / market-value election |
| 7-jährige Sperrfrist | 7-year lock-up period (post-reorganization divestment triggers retroactive taxation) |
| § 8c / § 8d KStG (Verlustabzugsbeschränkung) | loss forfeiture on change of ownership (Art. 8c/8d KStG) |
| stille Reserven | hidden reserves / built-in gains |
| Verlustverrechnung im Rahmen der Organschaft | loss offset within a fiscal unity |
| Grunderwerbsteuer bei Anteilskauf (§§ 1 Abs. 2a, 2b, 3, 3a GrEStG) | real estate transfer tax on share deal (share-deal RETT rules) |
| 90%-Schwelle (seit 2021) | 90% threshold (2021 RETT reform: triggered on 90%+ share transfer over 10 years) |
| Altgesellschafter / Neugesellschafter | pre-existing / new shareholder |
| Tax Indemnity / Steuerfreistellung | tax indemnity |
| Steuergarantien | tax warranties |
| Stichtag / Closing Date | closing date |
| pre-closing-Zeitraum | pre-closing period |
| Straddle Period | straddle period |

## 10. Personal Taxation and Inheritance

| German | English |
|---|---|
| Einkunftsarten | categories of income (ESt has seven statutory categories) |
| Einkünfte aus nichtselbständiger Arbeit | employment income |
| Einkünfte aus Gewerbebetrieb | business / trade income |
| Einkünfte aus selbständiger Arbeit | professional / freelance income |
| Einkünfte aus Kapitalvermögen | investment income |
| Einkünfte aus Vermietung und Verpachtung | rental income |
| Einkünfte aus Land- und Forstwirtschaft | agricultural / forestry income |
| sonstige Einkünfte | other income (pensions, private capital gains, etc.) |
| Progressiver Steuertarif (0–45%) | progressive tax scale (0–45%) |
| Reichensteuer (45%) | top-rate ("rich tax") |
| Grundfreibetrag | basic tax-free allowance |
| Werbungskostenpauschale | standard income-related expenses allowance |
| Sparer-Pauschbetrag | saver's lump-sum allowance (investment income) |
| Abgeltungsteuer auf Kapitaleinkünfte (25%) | final flat-rate withholding on investment income |
| Günstigerprüfung | "better-off" test (election of progressive rate vs flat withholding) |
| Halbeinkünfteverfahren (historic) | half-income procedure (pre-2009) |
| Teileinkünfteverfahren | partial-income procedure (60% taxable, 40% exempt — for significant shareholdings) |
| Spekulationsfrist (historic) | speculation period (private capital gains on real estate, 10 years) |
| Altersentlastungsbetrag | old-age relief amount |
| Erbschaftsteuer | inheritance tax |
| Schenkungsteuer | gift tax |
| Steuerklasse I / II / III | ErbSt/SchenkSt classes I / II / III |
| Freibetrag (Ehegatten 500.000 €, Kinder 400.000 €) | tax-free allowance (spouse €500k, child €400k) |
| Verschonungsabschlag für Betriebsvermögen | business assets exemption (85% / 100% — ErbStG §§ 13a-b) |
| Lohnsummenklausel / Behaltensfrist | payroll-sum clause / retention period |
| gemeiner Wert | market value / fair market value |
| Pflichtteil | compulsory portion (civil law — forced heirship) |
| Erbbaurecht | heritable building right |
| Nießbrauch | usufruct |
| Grundstückswert | real property value |
| Kirchensteuer (8% / 9% auf ESt) | church tax (8–9% of ESt) |

## 11. Tax Incentives and Special Regimes

| German | English |
|---|---|
| Forschungszulage (Forschungszulagengesetz) | R&D allowance |
| Investitionszulage | investment subsidy |
| Zonenrandförderung (historic) | border-region subsidies (historic) |
| Ostdeutschland-Investitionsförderung | East-Germany investment incentives |
| Sonderabschreibung für Mietwohnungsneubau (§ 7b EStG) | special depreciation for new rental housing construction |
| Immobilienstandort / REIT-AG | German REIT (REIT-AG) |
| Tonnagesteuer (§ 5a EStG) | tonnage tax regime (for shipping) |
| degressive AfA (temporary) | declining-balance depreciation (temporary 2020–2022, and 2024) |
| Investitionsabzugsbetrag (IAB) | investment deduction allowance (for SMEs) |
| Mindestbesteuerung (MinBestG — Pillar Two) | Pillar Two minimum taxation |

## 12. Customs and Excise

| German | English |
|---|---|
| Zoll | customs |
| Zolltarif | customs tariff |
| Zollwert | customs value |
| Tarifierung / Einreihung | tariff classification |
| verbindliche Zolltarifauskunft (vZTA) | binding tariff information (BTI) |
| präferenzieller Ursprung | preferential origin |
| Zugelassener Wirtschaftsbeteiligter (AEO) | authorized economic operator (AEO) |
| aktive Veredelung | inward processing |
| passive Veredelung | outward processing |
| Zolllager | customs warehousing |
| Verbrauchsteuerrecht | excise tax law |
| Steuerlager | tax warehouse |
| EMCS | EMCS (excise movement and control system) |

## 13. Standard Verbal Anchors

| German | English |
|---|---|
| für Zwecke der Umsatzsteuer | for VAT purposes |
| für Zwecke der Körperschaftsteuer | for corporate income tax purposes |
| vorbehaltlich abweichender gesetzlicher Regelung | subject to any contrary statutory provision |
| zuzüglich der gesetzlichen Umsatzsteuer | plus statutory VAT (VAT-exclusive) |
| inklusive Umsatzsteuer | VAT-inclusive |
| unter Anwendung der Steuerschuldnerschaft des Leistungsempfängers | with application of the reverse-charge mechanism |
| steuerfrei nach § … UStG | VAT-exempt pursuant to Art. … UStG |
| die Einbehaltung erfolgt als Vorauszahlung / als abgeltende Steuer | the withholding is made as an advance payment / as a final tax |
| der Verkäufer stellt den Käufer frei von jeglichen Steuerlasten | the Seller holds the Purchaser harmless from any tax burden |
| aus Veranlagungszeiträumen vor dem Vollzugsstichtag | from assessment periods preceding the closing date |
| nach Maßgabe der zum jeweiligen Zeitpunkt geltenden steuerrechtlichen Vorschriften | in accordance with the tax law in force from time to time |

## 14. Section Headings (Recurring)

| German | English |
|---|---|
| STEUERLICHE DEFINITIONEN | TAX DEFINITIONS |
| STEUERLICHE GARANTIEN | TAX REPRESENTATIONS AND WARRANTIES |
| STEUERFREISTELLUNG / TAX COVENANT | TAX INDEMNITY / TAX COVENANT |
| DURCHFÜHRUNG VON BETRIEBSPRÜFUNGEN | CONDUCT OF TAX AUDITS |
| STEUERERSTATTUNGEN | TAX REFUNDS |
| STEUERLICHE ZUSAMMENARBEIT | TAX CO-OPERATION |
| UMSATZSTEUERLICHE BEHANDLUNG | VAT TREATMENT |
| QUELLENSTEUER UND AUFSTOCKUNG (GROSS-UP) | WITHHOLDING AND GROSS-UP |
| GRUNDERWERBSTEUER / VERKEHRSSTEUERN | TRANSFER TAXES |

## 15. Notes — Translator Guidance

- **KSt vs "corporate tax"**. Körperschaftsteuer is the federal corporate income
  tax (15%). Together with the solidarity surcharge (5.5% of KSt) and trade tax
  (Gewerbesteuer, varying by municipality but typically 14–17%), the effective
  total burden is approximately 30%. Translate KSt as "corporate income tax
  (KSt)" and always note that this is the federal component only — GewSt is
  separate.
- **Gewerbesteuer — no English equivalent.** A municipal tax on business income,
  computed on a separate base from KSt (with specific add-backs, e.g., 25% of
  interest, 20% of certain rent). Rate = federal base rate (3.5%) × municipal
  multiplier (*Hebesatz*, typically 400–500%, sometimes higher). Functionally a
  corporate-level tax, but with no single-word English equivalent. Translate as
  "trade tax (GewSt)" with a translator's note on first use; never as "business
  tax" or "municipal corporate tax" alone.
- **Solidaritätszuschlag.** A 5.5% surcharge on KSt (and, for high-income
  individuals, on ESt). Retained for corporates even after 2021 reform removed
  Soli for most individuals. Translate as "solidarity surcharge (Soli)" and flag
  that it still applies to KSt.
- **Kirchensteuer.** Church tax, levied as 8% (Bavaria, Baden-Württemberg) or 9%
  of ESt for members of recognized religious communities. Collected by the tax
  office and passed to the church. Translate as "church tax" — genuine tax, not a
  voluntary contribution.
- **Maßgeblichkeitsprinzip.** The authoritative principle: the commercial balance
  sheet (HGB) is authoritative for the tax balance sheet, subject to tax-specific
  overrides (e.g., restrictions on provisions, hidden reserves, off-book
  depreciation). Translate as "authoritative-principle rule" and explain that it
  is the bridge between accounting profit and taxable profit.
- **Organschaft.** German fiscal unity / tax group. Requires (i) financial
  integration (>50% voting rights by the controlling entity), (ii) a profit-and-
  loss transfer agreement (Gewinnabführungsvertrag, 5-year minimum) registered in
  the commercial register, and (iii) actual implementation. Translate as "fiscal
  unity" or "tax group" and preserve "Organschaft" in parentheses on first
  mention — no clean English one-word equivalent.
- **§ 8b KStG.** The participation exemption for dividends and capital gains on
  shareholdings in corporations. 95% of the amount is exempt (with a 5%
  disallowance for assumed expenses). For dividends, a 10% minimum participation
  is required (no holding period for KSt; 1-year holding for trade tax). Always
  cite § 8b KStG.
- **Zinsschranke.** Interest limitation rule (Art. 4h EStG / Art. 8a KStG): net
  interest expense deductible only up to 30% of tax EBITDA. Exceptions:
  €3m safe-harbor threshold, standalone exception, equity-escape exception.
  Translate as "interest limitation rule" or "German interest barrier".
- **vGA (verdeckte Gewinnausschüttung).** Constructive / deemed dividend: any
  asset advantage given by a corporation to a shareholder that a prudent manager
  would not have granted to a third party. Triggers income at shareholder level
  and non-deductibility at company level. No capital gains exemption. Translate
  as "constructive (deemed) dividend" or "hidden profit distribution" — and flag
  as a key audit risk.
- **Wegzugsbesteuerung (§ 6 AStG).** German individual exit tax on unrealized
  gains in shares ≥1% (corporations) when an individual ceases to be resident.
  Reformed in 2022 (removal of automatic deferral for EU/EEA moves; installment
  payments available instead). Translate as "German exit tax" and cite § 6 AStG.
- **Hinzurechnungsbesteuerung (AStG §§ 7–14).** German CFC rules. Passive income
  of a low-taxed (<15%) CFC is attributed to German residents proportionally.
  Reformed in 2021 (ATAD implementation). Translate as "German CFC rules" or
  "add-back taxation" — keep the AStG citation on first mention.
- **Mantelkauf / § 8c KStG.** Loss forfeiture on change of ownership: acquisition
  of >50% of shares within 5 years eliminates loss carry-forwards. Art. 8d KStG
  offers an escape (continuation-linked carry-forward). Restructuring clause in
  Art. 8c(1a) KStG preserves losses in genuine turnaround cases. Flag whenever
  translating M&A documents involving target with loss carry-forwards.
- **Grunderwerbsteuer (GrESt) auf Share Deals.** Since the 2021 reform, a share
  deal transferring ≥90% of shares in a real-estate-holding company within 10
  years triggers RETT. Rates vary by Land (typically 3.5%–6.5%). Translate as
  "share-deal real estate transfer tax" and always specify the applicable rate.
- **Abgeltungsteuer.** Final flat-rate withholding on investment income: 25% +
  5.5% Soli + church tax (if applicable), effectively ~26.4–28%. Applies to
  interest, dividends, and private capital gains. "Discharging" in the sense
  that no income tax return filing is required if properly withheld. Translate
  as "final flat-rate withholding tax" or "Abgeltungsteuer" with explanation.
- **Steuerhinterziehung (§ 370 AO) + Selbstanzeige (§ 371 AO).** Tax evasion is
  a criminal offense. Voluntary disclosure (*Selbstanzeige*) before discovery can
  extinguish criminal liability, subject to strict completeness and timeliness
  requirements (tightened in 2011 and 2015). Translate as "tax evasion" and
  "voluntary disclosure with exculpating effect" — do not conflate with mere
  amendment.
- **ELSTER.** Mandatory electronic tax filing portal. When a source cites an
  ELSTER reference, preserve the tag and translate surrounding narrative.
- **Pillar Two (MinBestG).** Germany implemented Pillar Two via the
  *Mindestbesteuerungsgesetz* (MinBestG), effective for financial years beginning
  on or after 31 December 2023. Translate the statutory name as "German Pillar
  Two Act (MinBestG)" and use OECD English acronyms (IIR, UTPR, QDMTT).
- **BMF-Schreiben.** Administrative guidance issued by the Federal Ministry of
  Finance — binding on the tax administration but not on taxpayers or courts.
  Persuasive. Translate as "BMF circular" and preserve the date of the circular
  on first mention.
- **Currency / number formats**. German uses dot as thousands separator and
  comma as decimal separator (1.234,56 €). Convert to US/UK English style (1,234.56) unless
  the user specifies otherwise. Always preserve the euro sign and exact figure.
