Update on a German tax problem: Double assessment of real estate transfer tax for the acquisition of company shares

Facts and core dispute

An investor entered into a purchase agreement on 11 March 2024 (signing) to acquire 100% of the shares in a GmbH-owning German real estate. The transfer of shares was effected on 29 March 2024 (closing). The tax office issued two RETT assessments on the same day:

1. At signing, against the buyer pursuant to § 1(3) no. 1 GrEStG (share unification); and
2. At closing, against the target company pursuant to § 1(2b) GrEStG (change in shareholder structure).

The taxpayer’s request for a suspension of enforcement (Aussetzung der Vollziehung, AdV) was initially denied by the Lower Tax Court Berlin-Brandenburg, but granted upon appeal by the BFH.

Key findings of the BFH

1. Statutory priority of § 1(2b) GrEStG

The BFH stressed the clear wording of § 1(3) GrEStG, which applies only “insofar as taxation under paragraph 2b does not occur”. This establishes a priority rule: if the requirements of § 1(2b) GrEStG are met (typically at closing), taxation under § 1(3) GrEStG (signing) is precluded. The court therefore considers double taxation to be legally questionable.

2. Rejection of the date-specific approach

The tax authority argued that the priority rule applies only where signing and closing coincide temporally. In staggered transactions, both events would trigger RETT, with relief granted only ex post under § 16(4a), (5) GrEStG. The BFH rejected this interpretation, clarifying that procedural notification rules do not override substantive tax law.

3. Relevance of actual knowledge

The BFH further held that the tax office may not knowingly issue two RETT assessments if it is already aware that closing has occurred at the time of assessment. This applies even where statutory notification deadlines have not been strictly met.

Practical implications

The BFH decision significantly strengthens the position of taxpayers in cases of “double RETT” in share deals:

• Immediate action required: Taxpayers affected by dual assessments should file objections and apply for AdV without delay, referring to BFH II B 13/25.
• Maintain proper documentation: Despite the BFH’s leniency regarding notification deficits where actual knowledge exists, full and timely reporting of signing and closing remains essential.
• Outlook: Although the decision is interim, subsequent BFH rulings (e.g. II B 47/25) confirm this direction, indicating a shift away from the longstanding administrative practice of double taxation.

Conclusion

The BFH’s order calls into question a central administrative position in German RETT practice. For international investors, it provides a strong basis to challenge dual assessments, and enhances legal certainty in structuring German real estate share deals.

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Philip Goll is a partner at Pfeiffer Link PartG mbB Steuerberatungsgesellschaft. He is a certified German tax advisor and public auditor. His core expertise includes international taxation, corporate restructuring, and real estate transfer taxation. In addition to his practice, he shares his expertise as a lecturer on real estate transfer tax at his alma mater, the HWG Ludwigshafen.