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Notifying foreign holdings to the German tax office (§ 138(2) AO)

Domestic taxpayers — those with a residence, habitual abode, place of management or seat within the scope of the Act — must notify their tax office of four kinds of foreign situation: the formation and acquisition of businesses and permanent establishments abroad, the acquisition, disposal or CHANGE of an interest in foreign partnerships, certain interests in foreign corporations, and the first occasion on which they can exercise controlling or determining influence over a third-country company (§ 138(2) AO). The deadline is a COMPLETELY DIFFERENT one from the rest of § 138: these notifications are made TOGETHER WITH the tax or determination return, and at the latest within 14 MONTHS of the end of the tax period (§ 138(5) sentence 1 AO) — not within one month.

Up to date for 2026 — verified on September 23, 2026Official procedure, no printed formGuide: about 35 min

Deadlines

Together with the income tax, corporation tax or determination return for the tax period in which the situation arose
§ 138(5) sentence 1 AO
At the latest: 14 MONTHS after the end of that tax period
§ 138(5) sentence 1 AO — the same provision names both, and the second limit applies regardless of when the return is actually filed
For anyone with no return to file: 14 months after the end of the CALENDAR YEAR in which it arose
§ 138(5) sentence 3 AO, on the officially prescribed form
For contrast: notifications under subsections 1, 1a and 1b are due within ONE MONTH
§ 138(4) AO — the same section, an entirely different rhythm

Documents to prepare

  • ELSTER access with a certificate or an ELSTER business account
  • The name, seat and place of management of the foreign company
  • The type of economic activity of the business, establishment or company
  • All interests already held, direct and indirect
  • Acquisition cost per interest and in total
  • The date of formation, acquisition, disposal or change
  • For controlling influence: the related parties within § 1(2) AStG
  • The tax or determination return for the period concerned
See the procedure on the official site

No form is attached to this procedure: the link leads to the official page that describes it.

What this page gives you

The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.

Who this applies to

  • Anyone FORMING OR ACQUIRING a business or permanent establishment abroad (§ 138(2) sentence 1 no. 1 AO)
  • Anyone acquiring, giving up or CHANGING an interest in a foreign partnership — a mere change suffices (§ 138(2) sentence 1 no. 2 AO)
  • Anyone acquiring or disposing of interests in a corporation, association or estate with its seat AND place of management abroad, where this reaches an interest of at least 10 PER CENT of capital or assets, or where the total acquisition cost of ALL interests exceeds 150 000 EUROS (§ 138(2) sentence 1 no. 3 AO)
  • Anyone who, alone or together with related parties within § 1(2) AStG, can for the FIRST time exercise, directly or indirectly, controlling or determining influence over the corporate, financial or business affairs of a THIRD-COUNTRY COMPANY (§ 138(2) sentence 1 no. 4 AO)
  • NOT caught on the acquisition and disposal of interests of LESS THAN 1 PER CENT where the main class of the company's shares is substantially and regularly traded on an exchange in an EU Member State or EEA contracting state, or on an exchange admitted in another state by the Federal Financial Supervisory Authority under § 193(1) sentence 1 nos. 2 and 4 of the Capital Investment Code (§ 138(2) sentence 2 AO)
  • A third-country company is a corporation, association or estate with its seat or place of management in states or territories that are NOT members of the European Union or the European Free Trade Association (§ 138(3) AO)

Worked example

Feinmechanik Strobel GmbH acquires an interest in a company abroad in May 2026

The company buys 8 per cent of a foreign stock corporation; it already held 4 per cent. In deciding whether notification is required, ALL interests held must be taken into account (§ 138(2) sentence 3 AO) — it therefore reaches 12 per cent and crosses the threshold of at least 10 per cent of capital or assets (§ 138(2) sentence 1 no. 3(a) AO). The notification is due even though the individual purchase would have stayed below the threshold on its own. In addition, direct and indirect interests must be aggregated (§ 138(2) sentence 3 AO, final half-sentence). The TYPE OF ECONOMIC ACTIVITY of the company must also be notified (§ 138(2) sentence 2 AO). Whether number 4 applies as well turns on a preliminary question to be settled before filing: a third-country company exists only where the state of the seat or place of management belongs NEITHER to the European Union NOR to the European Free Trade Association (§ 138(3) AO). The statute does not make that classification for you; it must be checked for the state in question. And now the deadline that sets this procedure apart from every other § 138 duty: the notification is made together with the 2026 corporation tax return, and at the latest within 14 months of the end of that tax period (§ 138(5) sentence 1 AO), that is by the end of February 2028. Anyone thinking of the one-month period in § 138(4) AO is confusing the subsections: that one governs the notifications in subsections 1, 1a and 1b.

How to fill it in, step by step

  1. Check first whether you are a domestic taxpayer within the provision: residence, habitual abode, place of management or seat within the scope of the Act (§ 138(2) sentence 1 AO).
  2. Allocate the transaction to one of the four numbers — permanent establishment abroad, foreign partnership, interest in a foreign corporation, or first controlling influence over a third-country company.
  3. For interests, aggregate ALL holdings, direct and indirect (§ 138(2) sentence 3 AO) — not just the current purchase.
  4. Check both thresholds in number 3: at least 10 per cent of capital or assets, OR more than 150 000 euros of total acquisition cost across all interests.
  5. Check the exception for holdings below 1 per cent in listed companies (§ 138(2) sentence 2 AO), and leave non-notifiable acquisitions and disposals out of account when totalling acquisition costs (sentence 4).
  6. Establish whether a third country is involved: states or territories belonging neither to the European Union nor to the European Free Trade Association (§ 138(3) AO).
  7. Record the TYPE OF ECONOMIC ACTIVITY — it must be notified in all cases under numbers 1 to 4 (§ 138(2) sentence 2 AO).
  8. Log in to Mein ELSTER and transmit the notification of foreign situations TOGETHER WITH the tax or determination return for the period concerned (§ 138(5) sentence 1 AO).
  9. Diary the outer limit of 14 months after the end of the tax period — it applies regardless of when the return is actually filed (§ 138(5) sentence 1 AO).

Good to know

  • The same section carries two entirely different deadlines: ONE MONTH for the notifications in subsections 1, 1a and 1b (§ 138(4) AO), and the return deadline with the 14-month limit for the foreign situations in subsection 2 (§ 138(5) sentence 1 AO).
  • Number 2 requires notification even on a mere CHANGE in an interest in a foreign partnership — not only on acquisition or disposal.
  • The two thresholds in number 3 stand as ALTERNATIVES: at least 10 per cent, OR more than 150 000 euros of acquisition cost. Either one suffices.
  • All interests held must be taken into account in measuring the holding, and direct and indirect interests are aggregated (§ 138(2) sentences 3 and 4 AO). A purchase therefore becomes notifiable through the existing stock.
  • Non-notifiable acquisitions and disposals are LEFT OUT OF ACCOUNT when totalling acquisition costs (§ 138(2) sentence 2, final part, AO).
  • Number 4 does not attach to a percentage but to the POSSIBILITY of exercising controlling or determining influence for the first time — alone or with related parties within § 1(2) AStG.
  • EFTA states are not third countries within § 138(3) AO: the definition excepts members of the European Union AND of the European Free Trade Association.
  • Anyone not obliged to file the tax or determination return electronically makes the notifications on the officially prescribed form — unless they file that return electronically of their own accord (§ 138(5) sentence 2 AO).

Common mistakes

  • Applying the one-month period in § 138(4) AO. It governs subsections 1, 1a and 1b; subsection 2 follows the return deadline with the outer limit of 14 months (§ 138(5) sentence 1 AO).
  • Measuring only the current purchase. All interests held must be taken into account in determining the holding (§ 138(2) sentence 3 AO).
  • Leaving out indirect interests. Direct and indirect interests are aggregated (§ 138(2) sentence 3 AO).
  • Watching only the 10 per cent threshold. Total acquisition cost across all interests of more than 150 000 euros triggers the duty just as well (§ 138(2) sentence 1 no. 3(b) AO).
  • Treating a mere change in an interest in a foreign partnership as not notifiable (§ 138(2) sentence 1 no. 2 AO).
  • Omitting the type of economic activity. It must expressly be notified in the cases under numbers 1 to 4 (§ 138(2) sentence 2 AO).
  • Treating EFTA states as third countries. § 138(3) AO excepts members of the European Union and of the European Free Trade Association.
  • Stretching the small-holding exception to all listed shares. It requires a holding of less than 1 per cent AND substantial, regular trading of the main class on one of the exchanges named (§ 138(2) sentence 2 AO).

Frequently asked questions

What exactly must I notify?

The formation and acquisition of businesses and permanent establishments abroad, the acquisition, disposal or change of an interest in foreign partnerships, certain interests in foreign corporations, associations or estates, and the fact that you can for the first time exercise controlling or determining influence over a third-country company (§ 138(2) sentence 1 AO).

From what size of holding does it become notifiable?

Where this reaches an interest of at least 10 per cent of the capital or assets, or where the total acquisition cost of all interests exceeds 150 000 euros (§ 138(2) sentence 1 no. 3 AO).

Does my existing holding count?

Yes. All interests held must be taken into account in determining the holding, and direct and indirect interests are aggregated (§ 138(2) sentence 3 AO).

By when must I notify?

Together with the income tax, corporation tax or determination return for the tax period in which the situation arose, and at the latest within 14 months of the end of that tax period (§ 138(5) sentence 1 AO).

And if I have no return to file at all?

You then make the notifications on the officially prescribed form within 14 months of the end of the calendar year in which the notifiable situation arose (§ 138(5) sentence 3 AO).

What is a third-country company?

A corporation, association or estate with its seat or place of management in states or territories that are not members of the European Union or of the European Free Trade Association (§ 138(3) AO).

Go further

Compute the related amounts

Understand this form: the related course

Related forms

Official sources

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Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.