The equity capital escape (§ 4h (2) sentence 1 letter c) EStG) will essentially remain in place. However, when calculating the equity ratio, the increase in equity by half of special items with an equity portion is to be omitted.
Additionally, two changes are planned in the corresponding provision of § 8a (3) KStG. Subsequently, the full deduction of interest due to the application of the escape clause by means of an equity ratio comparison between the relevant business entity and its associated group is only possible if there is no harmful shareholder debt financing.
In view of the ATAD Directive, the relevant shareholding threshold (“at least” 25 % instead of “more than” 25 %) has been adjusted. On the other hand, the case law of the German Federal Fiscal Court is to be “corrected”. In its ruling of November 11, 2015 (Case No. I R 57/13), the German Federal Fiscal Court had decided that the remuneration for debt capital of the individual qualified shareholders is not to be cumulated when examining the 10 % limit regarding harmful shareholder debt financing, i.e. the 10 % limit is to be examined individually for each shareholder. Even though the ruling was published in the Federal Tax Gazette and in the Corporate Income Tax Notes on § 8a KStG and could thus far be applied in administrative practice beyond the scope of the individual case decided, in the future the aggregation is to be made binding by law, which means that the shareholder debt financing that is detrimental to the interest deduction will be reached much more quickly.