From 2025, a new reporting requirement for capital gains tax on dividends from German shares and depositary receipts of domestic issuers will apply. We are already working intensively on the new MiKaDiv reporting procedure.
With the new MiKaDiv reporting procedure, custodian banks and other domestic paying agents must notify the German Federal Central Tax Office of the investment income paid to investors in Germany and abroad. In addition, domestic stock exchange-listed companies must report the owners of their shares to the German Federal Central Tax Office, which collects this data and uses it in the context of refund and imputation procedures.
The legislature is gradually preparing for fully digitised reporting. A mass data interface has been announced by the German Federal Central Tax Office for this procedure and beta versions of the submission data records were already provided at the beginning of the year. (Individual procedures such as electronic claim submission and notice retrieval have already been required by law since January 1, 2023). Banks and implementation partners now have about two years until the interface goes live, as electronic reporting for tax withholding on dividend payments will be mandatory from 2025. The go-live of the test platform is already planned for June 2024.
This phase must now be used to resolve business and technical issues, check required processes, and prepare for data collection and transmission.
The new procedure has been on our agenda for quite some time and we have set up an Expert Group on AbzStEntModG/MiKaDiv in order to maintain a constant exchange with our clients’ experts.
With regard to the new digital mass-processing interface of the German Federal Central Tax Office and the associated tax reclaim process, we have also initiated a separate Expert Group. In addition, our participation in the MiKaDiv User Group as well as the User Group Mass Data Interface for Capital Gains Tax Refund of the German Federal Central Tax Office in Berlin provides us with direct access to the implementing authority.
Based on past discussions with various financial institutions, we have already been able initiate the development of specific software components in RAQUEST. With our STTI interface we have already created the basis for digital data transmission to various tax authorities (such as for the markets Denmark, Switzerland or even Austria). This will now be expanded to include the gateway to the German Federal Central Tax Office.
From a functional perspective, we will address the digital application for tax reclaims with the German Federal Central Tax Office, the new data deliveries, as well as new depositary functions.
