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Monthly Dose of Germany
March 2023
We would like to share some interesting insights into the German Legal market and recent developments as well as interesting events and publications with you. This edition of our "Monthly Dose of Germany" is presented by our China Desk, headed by Dr. Michael Fischer.
Company pension law – Case Law update 1/2023
Our Spring 2023 Client Alert on current case law deals, inter alia, with the judgements of the BAG of 17 January 2023 (3 AZR 220/22) on the alternative granting of an old-age pension benefit provided as a standard benefit as a capital payment and of 15 November 2022 (3 AZR 505/21) on the continuation of its case law on Section 16 BetrAVG. Topics:
- (Ineffective) reservation by the employer to grant an employer-provided pension benefit as a capital payment (BAG judgement 17 January 2023, 3 AZR 220/22)
- Section 16 BetrAVG Update 2023 I.a. no group-related calculation penetration in the context of the adjustment test pursuant to Sec. 16 (1) BetrAVG in the (mere) existence of an isolated profit and loss transfer agreement, no meaningfulness of pension provisions under company pension law, no hypothetical assessment of the economic situation of the employer, ex post assessment of the business development of the last three fiscal years for the forecast of the economic development as a rule (BAG judgement 15 November 2022, 3 AZR 505/21)
- Obligation to pay contributions for pension benefits from old-age pensions in accordance with Section 229 of Fifth Social Code (Sozialgesetzbuch V, SGB V)
Is your tax CMS fit for an audit by the tax authorities?
Since 01.01.2023, the tax authority can audit the effectiveness of a Tax CMS
As of 1 January 2023, the tax authorities are testing a new audit method and are allowed to check the effectiveness of a Tax Compliance Management System (Tax CMS) within the scope of an external audit. If the Tax CMS is effective, audit facilitations for the subsequent external audit will be granted upon application.
In the past, tax auditors sometimes requested Tax CMS documents from the audited companies at the beginning of an audit. With Art. 97 Section 38 Introductory Act to the Fiscal Code (Einführungsgesetz zur Abgabenordnung, EGAO), this procedure was put on a "legal footing". Within the scope of a tax audit, Tax CMS can be checked for their effectiveness and binding commitments for future audit relief can be made.
Anti-Money Laundering Compliance | Protection of beneficial owners’ personal data
Current developments at national and EU level following a landmark ECJ judgment on the protection of beneficial owners’ fundamental rights
According to the judgment of the Court of Justice of the European Union (ECJ) of 22 November 2022 (cases C-37/20 and C-601/20), the unrestricted access for all members of the public to the transparency register as foreseen for all EU member states in the 5th EU Anti-Money Laundering Directive violates fundamental EU rights of beneficial owners.
A legislation creating legal certainty in line with Union law is expected at EU level at the earliest with the adoption of the 6th EU Anti-Money Laundering Directive (awaited for mid-year 2023 as part of the comprehensive “EU Anti-Money Laundering Prevention Legislative Package”), at the level of the EU member states only with the subsequently still necessary implementation of the required amendments in the respective national anti-money laundering acts.
Remuneration of the works council/staff council - Update 2023
Adaptation of the BGH's infidelity judgement of 10 January 2023 in Remuneration Practice
The remuneration of works council/staff council members is once again in the focus of remuneration practice following the so-called infidelity judgement of the German Federal Criminal Court of 10 January 2023 (6 StR 133/22). This Client Alert discusses the relevant implications for remuneration practice - both with regard to the content of the remuneration of the works council/staff council and with regard to the scope remaining for the management bard, in particular within the framework of the business/legal judgement rule.
Employers must establish a legally sound remuneration system for the remuneration of their exempted works council/staff council members, which must, among other things, observe both the prohibition of preferential treatment under works constitution law and the prohibition of discrimination under works constitution law. In the past, practice has developed remuneration systems for this purpose, which, among other things, also take into account the individual company's special provisions regarding the remuneration structure and the concrete composition of the workforce (and related determination of the group of comparable employees for company's customary professional development that is decisive for the remuneration determination) in a way that is both appropriate and legally compliant. The legal principles established by the German Federal Criminal Court (Bundesgerichtshof, BGH) in the infidelity judgement are a reason and an opportunity for employers to review the existing remuneration system for works council/staff council members with regard to its current conformity with company/staff constitutional law and to develop it further if necessary. This applies in particular to members released from their operational work for works council/staff council activities, but also to non-released members.
Article by Dr. Lars Hinrichs, Dr. Volker Schulenburg, Elisa Ultsch and Leonie Wüpper.
Read full article here.
Transaction News
We at Deloitte Legal Germany are constantly advising on numerous complex transactions and challenging projects.
We would be delighted to explain our services portfolio to you and discuss with you how we at Deloitte Legal Germany can assist you with your projects, whether in the field of Corporate Reorganizations, M&A transactions, including carve-outs, general commercial, employment law, IT/IP or LMC/LMS. Just reach out to us!
In order for you to better understand how we have helped other clients, we would like to hereinafter showcase information on two projects that our teams have recently advised on.
Deloitte Legal advises on sale of healthcare PR agency 3K Agentur für Kommunikation GmbH
A Düsseldorf-based Deloitte Legal team led by Corporate/M&A partners Michael von Rüden and Thilo Hoffmann has advised on the sale of Frankfurt-based healthcare PR agency 3K Agentur für Kommunikation GmbH to the UK's WPP Group.
Deloitte Legal advises low-code platform operator Simplifier AG on growth financing
The Deloitte Legal team led by Corporate/M&A partners Michael von Rüden and Thilo Hoffmann has advised Würzburg-based software producer Simplifier AG on a growth financing round.
Deloitte Legal Webcast Series
In our German language Deloitte Legal Update webcast series, we address current legal issues and developments that are important for corporate practice.
In our upcoming "Legal Update" webcast we will discuss:
Transparency Register Update | Recent developments at national and EU level
Wednesday, 29 March 2023 | 11:00 - 11:45 a.m.
Register here (Webcast in German language)
You can download the presentations of our recent webcasts here:
- Why lawyers need not fear generative AI - but should still keep an eye on it here (in English language)
- Remuneration of Works Council/Staff Council and Remuneration of Supervisory Board – Update 2023 here (in English language)
In our Webcast Archive, you can find a list of previous webcasts and also download the corresponding presentations.
Should you be interested in topics discussed during one of our German language webcasts, do not hesitate to contact the respective presenters – they will be delighted to provide you with additional information in the English language.
Tax Law Update
Ministry of Finance publishes draft legislation to implement the EU Pillar Two Global Minimum Taxation Directive into domestic German tax law
Draft bill is in line with requirements as described in the EU directive, introduces qualified domestic minimum top-up tax (QDMTT).
On 20 March 2023, the German Ministry of Finance published draft legislation on the domestic implementation of the EU directive on ensuring a global minimum level of taxation for multinational enterprise (MNE) groups and large-scale domestic groups in the EU (“Pillar Two” directive). The draft legislation is open for public comments until 21 April 2023.
Read full article by Andreas Maywald and Alexander Linn in our Tax & Legal News.
