GERMANY LAW AND PRACTICE Contributed by: Daniel Möritz, Jan Bonhage, Hendrik Bockenheimer, Carl-Philipp Eberlein, Markus Ernst, Matthias Rothkopf, Christoph Wilken and Alexander Rang, Hengeler Mueller
Notification Requirements and Assessment Procedure The following transactions relating to changes in the shareholder structure trigger the notification require - ment: • the acquisition of a qualifying holding; • exceeding the thresholds of 20%, 30% or 50% of the capital or voting rights in the regulated entity; and • disposing of the qualifying holding or falling below the thresholds of 20%, 30% or 50% of the capital or voting rights. The notification requirement is triggered by the spe - cific intention to conduct one of the three directly aforementioned transactions. In M&A transactions, it is common practice in Germany to file the notification within a few days of the corporate decision-making process being completed and of all board resolutions having been passed. If not yet available at that time, supporting documentation must be filed as soon as possible at a later stage. The documentation to be filed with the competent authorities varies depending on the target stake in the regulated entity. Specifically in the case of an acqui - sition of a majority stake, but also in the other cases listed here, the documentation requirements are quite comprehensive. These include information on the purchaser, its management, the financing structure and the strategy followed by the acquisition. Certain exceptions and waivers may apply in specific circum - stances. The competent authority has 60 working days to review the notification. This 60-working-day period, which may be subject to an extension by the com - petent authority, starts as soon as the competent authority has received and confirmed the completed filing, including all supporting documentation. Owing to additional information requests by the author - ity, the entire assessment period can take longer in practice (typically, between three and 12 months). On the other hand, the competent authority may issue a “non-objection letter” if and when it is satisfied that no objection should be raised.
Competent Regulatory Authority and Completion of Prudential Assessment In most cases, the competent authority for the share - holder control procedure is the German Federal Finan - cial Services Supervisory Authority ( Bundesanstalt für Finanzdienstleistungsaufsicht , or BaFin). For certain regulated entities, the notification must also be filed with the German Central Bank ( Deutsche Bundes- bank) . Since the introduction of the Single Supervisory Mechanism, the European Central Bank (ECB) is the competent authority for credit institutions regulated under the EU Capital Requirements Regulation (Regu - lation (EU) 575/2013). Although the notification must also be filed with BaFin in this case, the prudential assessment of the acquisition is completed by a for - mal decision of the ECB. The purchaser may not close the transaction before the 60-working-day period for the prudential assess - ment has lapsed or the competent authority has pro - vided the purchaser with a non-objection letter (regu - latory clearance). Therefore, regulatory clearance is a closing condition in the transaction documentation (sale and purchase agreement). That closing condition is typically supported by an undertaking by the pur - chaser to perform certain actions or to make commit - ments to the competent regulatory authority to ensure that regulatory clearance will be granted. German tax-resident corporations are subject to German taxation in terms of their worldwide income. Foreign tax-resident corporations are subject to Ger - man taxation if and to the extent that income can be attributed to German permanent establishments/rep - resentatives or there is other German-source income (subject to limitations by double-tax treaties (DTTs), taking into account amendments to certain DTTs through the so-called Multilateral Instrument (MLI) Implementation Act). German corporate income tax is currently levied at a rate of 15.825% (15% tax rate plus 5.5% solidarity surcharge), with a preferential regime for dividends/ capital gains (95% tax exempt). To stimulate econom - 9. Tax 9.1 Taxation of Business Activities
250 CHAMBERS.COM
Powered by FlippingBook