Implement reporting requirements of the German Tax Authority (BZSt)

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.

MiKaDiv as amendment to the AbZstEntModG

Who is affected by the new 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.

Supplementary data

• Report General Data
• Customer data (e.g. account/custody account number, information on trustee)
• Chain of custody (e.g. LEI, legal status)
• Securities information (e.g. capital income, number of securities)
• Depository receipts (e.g. ISIN of deposited securities, subscription ratio)

Reporting requirements

• Resident taxpayers: reporting of additional information on the digital tax certificate as well as on the tax certificate
• Non-resident taxpayers: digital reporting instead of tax certificate
• Notification of unissued tax certificate or not executed notifications
• Exemption report (report of no or a not completely collected tax deduction)

Implementation of MiKaDiv requirements

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.

We are the implementation partner for our clients

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.

Data delivery for foreign financial institution

• Extension of import interfaces
• Support for integration and reporting of purchases and sales
• Easy provision of tax reports and tax certificates
• Transfer of relevant data (master data, tax data, revenue data and settlement, purchases and sales, payment chain information)
• Import of tax reports
• Integration of the reporting process into the digital application process

Processing procedures for domestic custodians

• Import of request for tax reports and tax certificates
• Import of additional client data (master data, tax data, revenue data and settlement, purchases and sales, payment chain information)
• Checking the conformity of the supplied data
• Generation of information for MiKaDiv reports
• Creation and management of the extended tax certificate from 2025 for tax residents
• Creation of the ordinal number (UUID)