In a decision dated 9 July 2025, the German Federal Fiscal Court (docket no. II B 13/25) addressed the issue of a double assessment of real estate transfer tax (RETT) in share deals, where the contractual obligation transaction (signing) and the actual transfer of shares (closing) occur at different times. The court found it legally questionable whether RETT can be levied twice on a share deal if there is a time difference between signing and closing. Although the decision was only made in the proceedings concerning the suspension of enforcement and a decision on the main proceedings is still pending, the decision fuels hope that the potential double taxation risk of RETT charges at signing and closing might get resolved.

What was the case about?

In the case decided, the taxpayer acquired all shares in a German limited liability company (GmbH) that owned German real estate. The signing of the share purchase agreement took place on 11 March 2024, and the closing of the transaction on 29 March 2024. The GmbH's real estate portfolio remained unchanged in the time period between signing and closing. The notary only reported the signing to the competent tax office, but not the closing.

The tax office assessed RETT twice: once against the GmbH pursuant to §1(2b) of the German RETT Act (GrEStG) (change in shareholder structure on 29 March 2024), and once against the buyer pursuant to §1(3) no.1 GrEStG (unification of shares on 11 March 2024). 

This was in line with the German tax authorities' view that, when signing and closing do not occur simultaneously, each may constitute a separate taxable event capable of triggering RETT. In that scenario, the taxpayer must rely on § 16(4a) GrEStG to get relief. Pursuant to this provision, where shares are transferred after the execution of a legal transaction within the meaning of §1(3) no.1 GrEStG and, by virtue of that transfer, the criteria of §1(2b) GrEStG are satisfied, any previous assessment issued under §1(3) no.1 GrEStG must, upon application, be revoked or amended (provided that both transactions have been properly notified to the competent tax office). For background, pursuant to §1(2b) GrEStG, a change in the shareholder structure of a real estate-owning corporation, whereby at least 90% of the shares are transferred to new shareholders within ten years, triggers RETT. Pursuant to §1(3) no.1 GrEStG, unless taxation under §1(2b) GrEStG applies, a transaction that establishes the right to transfer shares in the company also triggers RETT if the transfer results in the acquirer holding at least 90% of the company's shares.

However, according to §16(5) sentence 2 GrEStG, the relief is unavailable if any of the relevant transactions is not fully reported to the German tax authorities within the prescribed deadline. Because the actual share transfer of 29 March 2024 (i.e. closing) was not reported, the tax office declined to apply this provision and assessed RETT twice.

What was the decision of the German Federal Fiscal Court?

Upon summary review, the German Federal Fiscal Court stated that it is legally questionable whether, in the case of an acquisition of shares in a corporation where signing and closing take place at different times, RETT can be assessed twice if the tax office is already aware of the closing at the time of assessment.

The introductory sentence of §1(3) GrEStG explicitly states that taxation under §1(3) GrEStG should only occur "to the extent that taxation under paragraphs 2a and 2b is not applicable." The wording does not indicate any temporal limitation, thus the precedence applies to all circumstances under §1(3) GrEStG, even if signing and closing occur at different times.

In the specific case, the tax office was aware (at the time of issuing the second RETT assessment notice) that the share acquisition had already been completed and a tax liability under §1(2b) GrEStG existed. Therefore, the simultaneous issuance of two RETT notices contradicts the substantive legal precedence rule.

What are the practical implications of the decision?

The decision of the German Federal Fiscal Court has significant implications for the practice of share deals with a time gap between signing and closing. The ruling clarifies that a double assessment of RETT in these cases is legally questionable, at least in cases where the tax office is aware of the completion of the share acquisition. However, it needs to be considered that the decision of the German Federal Fiscal Court was only in a preliminary proceeding (on the suspension of enforcement proceedings). Therefore, the court has only expressed legal doubts about the administrative practice so far without declaring it unlawful. It is still unclear whether the administration will change its practice based on this decision.

Therefore, it is still required to ensure that both signing and closing of a share transaction involving German real estate are reported in full and in a timely manner (two weeks or one month, depending on the residence of the relevant taxpayer) to the competent tax office. Affected taxpayers should carefully monitor the scope of notifications required and comply with the relevant requirements. To the extent that a German tax office assesses RETT twice, taxpayers should consider filing an objection and applying for a suspension of enforcement until there is further clarity. Whether the German Federal Fiscal Court will rule in favour of the taxpayer in the main proceedings remains to be seen.