Brexit Accompanying Tax Act: The act contains provisions to prevent detrimental tax consequences, merely as result of a Brexit, with respect to circumstances that have been implemented by the taxpayer in the past (“Brexit as a harmful event”). For reasons of legal certainty and clarity, it came into force on 29 March 2019. Amongst others, the law amends the German Banking Act regarding the dismissal of risk takers, cross border financial services, own funds and enables BaFin to publish administrative acts.

Market Infrastructure Regulation: EMIR has been amended by the so-called EMIR REFIT and EMIR 2.2. The reform package brings changes regarding the calculation for clearing and hedging obligations as well as reporting obligations. It also introduces a category of a small financial counterparty. EMIR 2.2 sets out amendments regarding the supervision of clearing counterparties (CCPs) and the recognition of third country CCPs.

Prospectus: The new EU Prospectus Regulation has been applicable since 21 July 2019. Together with several delegated acts, technical standards and implementing measures, it replaces the previous Prospectus Directive.

Read more

 

Sustainable Finance Taxonomy: In October 2019, trialogue negotiations began on the planned EU Taxonomy Regulation, which aims at setting out uniform criteria, and a process for establishing a unified classification system, for determining whether an economic activity is environmentally sustainable. If a political agreement is reached early, the Regulation could be formally adopted in Q1 2020.

Sustainability risks: Until the beginning of November BaFin (Federal Financial Supervisory Authority) ran a consultation for a new leaflet on dealing with sustainable risks such as ESG factors for financial institutions, insurance companies and investment firms containing guidelines for risk and strategy planning and stress-testing.

Competition: Whilst the Amazon-probe was settled, FCA´s Facebook decision was quashed in interim appeal proceedings before the Higher Regional Court of Düsseldorf. It is now up to the Federal Court of Justice to determine whether a failure to comply with data protection laws may constitute an infringement of competition law. Further, the Federal Minister of Economics granted ministerial approval for the Miba/Zollern joint venture which was previously prohibited by the Federal Cartel Office.

Read more

Merger Control: The EU Commission issued another record fine for gun jumping by way of a two-step warehousing structure (Canon). Companies should exercise extreme caution in using these types of deal structures, in particular with regard to the foreseeable exercise of acquired options and pre-payments considerations.

Read more

Corporate Governance Code: In line with the implementation of the amended EU Shareholder Rights Directive the government commission resolved a fundamental change of the code in May, including provisions on the independence and remuneration of board members.

Trade Secrets: The Law on the Protection of Business Secrets against Illegal Acquisition, Use and Disclosure entered into force, implementing the EU Know-how Directive to create a uniform EU standard for the protection of trade secrets. Clients face stricter requirements for the protection of their trade secrets.

Whistleblower: New rules to protect whistleblowers revealing breaches of EU law in a wide range of areas were adopted in October. Member states must now implement the law within two years. It is expected that German legislation will be extended to also include breaches against national law.

Read more

Tracking cookies: The European Court of Justice has ruled that pre-checked consent boxes for tracking cookies are not permitted under the EU privacy laws. Consent must be explicit and obtained prior to storing or accessing tracking cookies for targeted advertising. Website operators are required to inform users about the storage periods and which third parties will have access to the information.

Social plug-ins: The European Court of Justice ruled that website operators incorporating Facebook’s “like button” are joint controllers under the General Data Protection Regulation. Companies that have integrated any social plug-ins on their website must therefore enter into a joint controller agreement with Facebook stipulating several data protection obligations.

ePrivacy: The EU-ePrivacy Regulation is still work in progress. Once finalised the regulation will propose greater regulation of electric communication and increase privacy. Companies will face substantial fines when in breach of the rules. Legislative progress is awaited: the trialogue negotiations have not yet begun. The regulation is not expected to come into force before 2020 implementing a transitional period of two years.

Digitalisation: The German Ministry of Finance published a paper regarding the prospective possibility of electronic securities issuances under German law. The paper raises the idea of issuance via blockchains and a number of different legal questions that go hand in hand with the introduction of such electronic securities. A concept regarding virtual shares is expected. The German Blockchain Strategy introduced a more detailed timetable regarding these developments.

Read more

Singapore Convention on Mediation: The so-called Singapore Convention on Mediation, which paves the way for settlements reached by mediation to be recognised internationally, opened for signature and was immediately signed by 46 states, including the US and China. The Convention will come into effect six months after the deposit of the third instrument of ratification, acceptance, approval or accession.

Read more

Hague Judgments Convention: The HCCH unveiled the final text of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. The so-called Judgments Convention aims to facilitate cross-border litigation by establishing a general recognition and enforcement regime for court judgments among Contracting States.

Read more

First Model Declaratory Action Proceedings: Since the new Model Declaratory Action Act came into force at the end of 2018, seven actions have been brought. The case against Volkswagen relating to the diesel scandal has been the focus of attention with the oral hearings starting in September. Decisions relating to the other cases brought important clarifications regarding the new law.

Read more

Reform of the Code of Civil Procedure: The Federal Government adopted a draft law which is intended to amend and modernise various provisions of the Code of Civil Procedure. The new law shall increase the quality and efficiency of civil court proceedings. It aims at regulating the value limit for appeals to the Federal Court of Justice in civil cases, increasing specialisation in the courts and amending other provisions of civil procedural law.

Collision Rule in Collective Bargaining Law: In companies where employees are represented by more than one trade union, the collective agreement of the trade union with the most employees in this company will apply to all employees irrespective of their union membership. Following a verdict of the Federal Constitutional Court the Collective Agreement Act was amended in 2019 to allow for the application of collective agreements of trade unions with a minority of employees, under certain circumstances.

Part-Time working: Legal entitlement to part-time work for a limited period of time came into force in January 2019. Employees can return to their previous working hours after a part-time phase of at least one and up to no more than five years.

Subsidies for renewables not considered to be state aid: The European Court of Justice did not consider the subsidy regime for electricity from renewable sources under the Renewable Energy Act 2012 to be state aid. Thus, energy-intensive companies which previously had to pay the EEG levy in arrears because they had supposedly been relieved too much might now be able to recover these post-payments.

Energy audits for companies with low energy consumption: Companies consuming fewer than 500,000 kWh per year will be able to comply with the obligation to conduct an energy audit by entering basic information on the company and its energy consumption in an online portal.

Disclosure rules for cross-border tax planning arrangements: In essence, the bill implements the provisions of the EU Directive (“DAC 6”) which has to be transposed into national legislation by the Member States until 31 December 2019. The highly controversial disclosure rules for purely national arrangements are not included.

Read more

Annual Tax 2019: The Omnibus Act provides for various tax measures such as the trade tax reduction for gains from shares in third country companies as well as the implementation of the union rules with respect to the VAT consignment stock.

Real Estate Tax Reform: The new provisions stipulate that the tax levy shall no longer be based on the land value (which had been rejected by the German Constitutional Court) but shall take into account other factors such as rental income. An opening clause allows the German states to base the real estate tax levy on a modified evaluation process.

Research and Development: This act implements tax incentives for research and development with a legal claim for all companies subject to limited or unlimited tax liability, irrespective of their size and legal form or their economic activities.