De-minimis threshold (Freigrenze)
De-minimis threshold (Freigrenze): The earnings stripping rules
do not apply where interest expense exceeds positive interest
income by less than € 3m (tax threshold). Thus, small and medium-
sized business enterprises are in many cases unaffected by the
new earnings stripping rules.
Non-group businesses (Konzernklausel): The earnings stripping
rules also do not apply to businesses that are not part of a con-
trolled group. An enterprise is regarded as part of a controlled
group if it is or could be included in consolidated financial state-
ments in accordance with IFRS, German GAAP, or US GAAP.
The exemption for non-controlled corporations applies only if
the corporation proves that remuneration on shareholder debt
accounts for at most 10% of net interest expense. Shareholder
debt is defined as debt capital received from a substantial share-
holder (more than 25%), a related person, or a third party having
recourse against a substantial shareholder or a related person.