GERMANY Law and Practice Contributed by: Stefan Altenschmidt, Pauline Müller and Ina Schwanke, Luther Rechtsanwaltsgesellschaft mbH
cal turnaround is currently taking place. Additionally, efforts are being made to accelerate the expansion of geothermal energy, which is covered by the provisions of the Federal Mining Act. Germany is a member of the international Extractive Industries Transparency Initia - tive (EITI) and supports initiatives such as the World Bank’s Climate-Smart Mining Strategy, which aims to make the mining sector more climate-sensitive and environmentally friendly, as well as the Intergovern - mental Forum on Mining, Minerals, Metals and Sus - tainable Development (IGF). 3.4 Energy-Transition Minerals The EU Critical Raw Materials Act, which came into force in May 2024, addresses the growing demand for 34 different raw materials that are particularly criti - cal for the energy transition. The Regulation aims to improve and diversify the EU’s supply of critical raw materials, strengthen circularity (including recycling) and support research and innovation in resource effi - ciency and substitute development. Furthermore, the Regulation establishes criteria for strategic projects relating to the extraction or recovery of critical raw materials. These projects are given priority status and may receive financial support. The EU has set a tar - get to extract at least 10% of its critical raw material consumption and process 40% within the EU by 2030. Under the directly applicable CRMA, Germany is required to establish a national exploration pro - gramme. This programme aims to identify and evalu - ate the potential of critical and strategic raw materials in Germany, with the intention of creating incentives for their development. The first exploration report was submitted to the European Commission in June 2025. 4. Taxation of Mining and Exploration 4.1 Mining and Exploration Duties, Royalties and Taxes As with all companies in the commodities sector, min - ing companies are subject to trade and corporate tax. Those in the legal form of a corporation, with their head office or management in Germany, are subject to unlimited corporate tax. Those that do not have their head offices and management in Germany are subject to corporate tax on income generated in Germany.
Corporate tax is a direct tax on a company’s income and currently stands at 15%. Trade tax is based on a mining company’s profits. The rate is 3.5% of the objective profit potential, multiplied by specific tax rates set by the municipality. In addition, special levies apply to mining activities. As mentioned in 1.4 Role of the State in Mining Law and Regulations , for exploration, the permit holder must pay EUR5 per square kilometre in the first year. This fee increases by EUR5 each year up to a maximum of EUR25. Expenses incurred in the permit area for exploration in the respective year are set off against the fee. The holder of an approval or mining property must pay an annual extraction tax equalling 10% of the market value of the resources extracted or co- extracted within the approval area during the relevant year. However, the federal states can set different amounts for the fee and the extraction tax, so the amount of levies varies from state to state. Germany also imposes taxes on electricity and energy products. These are indirect taxes, so they are levied on the supplier and passed on to the consumer via the price. 4.2 Tax Incentives for Mining Investors and Projects There are no specific tax incentives for mining pro - jects. However, mining companies can benefit from various tax relief options under energy and electric - ity tax law, as can manufacturing companies. The European Commission has also launched the Clean Industrial Deal State Aid Framework (CISAF), enabling member states to grant electricity price relief until the end of 2030, from which the mining industry could also benefit. Germany plans to implement such a system. Mining companies can also benefit from general investment incentives for the German economy. Until the end of 2027, companies can claim up to 30% degressive depreciation for investments in equipment. Mining companies can also receive a tax refund for investments in research and development. Further - more, corporation tax will be reduced by one per - centage point annually for five years, starting in 2028. However, there are no tax stabilisation agreements available in Germany.
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