Federal tax court issues second decision about double RETT in share deal transactions

Doubts about double RETT do not apply on RETT triggered by closing event in a share deal transaction

In a second interim court order dated 16 September 2025 that was published on 2 October 2025, Germany’s federal tax court provided its view about the legality of double assessments of real estate transfer tax (RETT) that might apply in share deal situations where the signing and closing of a share purchase agreement (SPA) occur on two different dates. Based on the view of the tax authorities, the signing of an SPA and the closing of the related transaction (which occur on different dates) might each qualify as a separate RETT triggering event requiring a timely filed notification to the responsible tax office. If both notifications are filed on time, the closing event “supersedes” the signing event and RETT is assessed only for the closing event. If the RETT notifications are not filed on time, RETT is assessed for both events, resulting in double RETT for one and the same transaction. In a first interim court order dated 9 July 2025 (see GTLN dated 08/11/25), the federal tax court expressed doubts about the double assessment of RETT in these situations. In its second interim court order, the federal tax court now expressed its view that despite the general doubts about the legality of a double assessment of RETT in these situations, it is not doubtful that RETT is triggered (at least once) as a result of the closing event in a share deal transaction. As a result, the federal tax court denied a suspension of the enforcement of the RETT assessment notice that was issued as a result of the closing of the underlying SPA.

The decision of the federal tax court was based on the following facts:

In a share sale transaction regarding the shares in a German real estate-owning company, the notarization of the SPA took place on 22 March 2024 (signing event). The closing of the transaction and the actual transfer of the shares took place on 2 April 2024 (closing event), after the purchase price was paid. Whereas the signing event was reported to the tax office on time, the reporting of the closing event was made late and outside of the required two-week period.
The tax office issued RETT assessment notices for both the 22 March 2024 signing event and the 2 April 2024 closing event (both assessment notices were issued on 30 May 2024). The RETT assessment for the signing event was issued to the acquirer of the shares in the German real estate-owning company, and the RETT assessment notice for the closing event was issued to the German real estate-owning company itself (in line with the procedural rules of the RETT Act). The German real estate-owning company, however, filed an appeal and an application for the suspension of enforcement against the RETT assessment notice that was issued as a result of the closing event, arguing that the double assessment of RETT violates legal principles.

The acquirer of the shares also filed an appeal against the RETT assessment notice that was issued as a result of the signing event. This appeal, however, was not the subject of the court procedure in front of the federal tax court and, therefore, was not considered in the decision of the federal tax court.

In the view of the German tax authorities, the signing and the closing events in a share deal transaction both qualify as RETT triggering events if the signing and closing events occur on separate dates. This result can only be avoided if the RETT notifications for both events are filed in full compliance with the requirements and within the prescribed notification deadlines (one month or two weeks, depending on the transaction) with the responsible German tax office. If the notifications are filed on time, any RETT arising from the signing event would be waived and RETT should only become payable as a result of the closing event. If the notifications are not filed on time, RETT would become due and payable for both events.

The federal tax court in its interim court order concluded that, even if a waiver of the RETT that was assessed for the signing event were to occur (e.g., if the double assessment for RETT is unlawful and violates legal principles), this would only have an impact on the RETT assessed for the signing event but not for the RETT assessed as a result of the closing event. As the applicant in the court procedure (the German real estate-owning company) was only affected by the RETT assessment resulting from the closing event, the federal tax court considered the application for suspension of enforcement to be unfounded. The federal tax court did not have any doubts as to the legality of the RETT due at closing.

Deloitte Germany comments

The second interim court order of the federal tax court on the “signing/closing” issue and potential double assessment of RETT deals with a case in which the parties to the SPA and the real estate-owning company itself failed to timely submit the required RETT notification as of the closing event. However, unlike in the first interim court order decided by the federal tax court in July 2025, where the federal tax court expressed its doubt whether RETT may be assessed twice for the signing and closing event in a share transaction, in the case at hand the court procedure was initiated by the taxpayer who was affected by the RETT assessment resulting from the closing event (and not by the taxpayer affected by the RETT assessment resulting from the signing event, as was the case in the July 2025 interim court order). Not surprisingly, the application in the present case was rejected by the federal tax court, as the federal tax court had no doubt about the legality of the RETT assessed as a result of the closing event. Thus, it should be noted once again that timely compliance with the RETT notification obligations is of utmost importance. Further, if RETT filings were missed, it is necessary to very carefully examine what measures can still be taken to possibly avoid a double assessment of RETT. Also, in case of doubt, all RETT assessments should be appealed in these cases so that they still can be canceled or amended. The federal tax court did not comment on the legality of the double RETT assessment in signing/closing situations, this decision will likely be the subject of future court decisions.

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