The Federal Council approved the Tax Amendment Act on December 19, 2025, which means that various provisions in the German Fiscal Code have been amended with effect from 2026. The following explanations provide an overview of the most important changes to the Tax Code.
1. e-sports as a new charitable purpose (§ 52 para. 2 sentence 1 AO)
E-sports (electronic sports) will be promoted as a new charitable purpose from 2026. E-sports are defined in more detail in the explanatory memorandum to the draft bill.
Definition: It is a sporting, digital competition in which people play video games against each other on a computer or games console using physical control elements (controller, keyboard, etc.). The playing field, the rules to be observed and the result are defined by the underlying software. The motor skills of the players must have a significant influence on the success of the game; it must not depend solely on chance. The practice of e-sports trains teamwork and the ability to react, which are decisive factors for success.
The bodies are obliged to comply with the legislation on the protection of minors. Games without a USK age rating are not permitted. Games in which brute force, such as the killing of people, is realistically simulated or tolerated are not compatible with the principle of promoting the general public. This also applies to games that disregard human dignity in any other way. Playing online games of chance is also incompatible with this principle. Furthermore, it is not compatible with the principle of promoting the general public if the use of money in a game provides competitive advantages over and above the purchase of the game (e.g. „EA FC - Ultimate Team“).
In particular, the bodies should also be dedicated to the prevention of addiction and teach a healthy approach to the medium.
2. increase in the exemption limit for the obligation to use funds promptly (section 55 (1) no. 5 sentence 4 AO)
The obligation to use funds promptly for tax-privileged corporations with income of up to €100,000 per year from 2026 (previously €45,000) will be abolished. This means that the obligation to use funds promptly will no longer apply to around 90% of tax-privileged corporations in future.
The obligation to use funds promptly includes the legal obligation not to leave funds (e.g. donations, contributions, income from business operations or asset management) permanently in the corporation's assets, but to spend them as quickly as possible for tax-privileged statutory purposes. Tax-privileged corporations must provide evidence of the prompt use of funds in their accounts by means of an appropriation statement.
3. photovoltaic systems as a non-tax-damaging activity (§ 58 No. 11 AO)
According to the new provision to be inserted, a corporation's activities are not considered tax-deductible if it uses funds for the construction and operation of photovoltaic systems and other systems in accordance with the Renewable Energies Act, provided that this is not the main purpose of the corporation.
As before, the feed-in of electricity not consumed by the company itself constitutes a taxable business operation under the general conditions if the income from all taxable activities exceeds the taxable threshold in accordance with Section 64 (3) AO. If profits are made from the photovoltaic system, these are generally taxable. However, special tax exemptions, in particular Section 3 No. 72 EStG, may apply.
4. increase in the exemption limit for taxable business operations (Section 64 (3) sentences 1 and 2 AO)
If income including VAT from business operations that are not special-purpose operations does not exceed a total of € 45,000 per year, corporation tax and trade tax have not been levied to date for reasons of simplification in order to reduce the bureaucratic burden on smaller tax-privileged corporations. This exemption limit will be increased to €50,000 from 2026.
It is also clarified that tax-privileged corporations that fall under this exemption limit do not have to make a distinction and allocation as to whether this income is to be allocated to taxable business operations or a special-purpose operation in accordance with Sections 65 to 68 AO.
5. increase in the exemption limit for sporting events (Section 67a (1) sentence 1 AO)
According to Section 67a (1) sentence 1 AO, sporting events of a sports club are generally treated as tax-privileged special-purpose operations if the income including VAT does not exceed a total of € 50,000 (previously € 45,000) per year. The fiction of a special-purpose business within the scope of an exemption limit for sporting events serves to simplify and reduce the bureaucracy of club taxation. The exemption limit of Section 64 para. 3 sentence 1 AO applies to taxable commercial business operations irrespective of the exemption limit of Section 67a para. 1 sentence 1 AO.
6. waiver of hearing in certain cases (Section 91 (2a) AO)
Currently, a hearing must be held in accordance with Section 91 (1) sentence 2 AO if the data declared in the tax return differs from the available electronic data of the parties obliged to provide information. Audits have shown that the data in accordance with Section 93c AO was never incorrect. Therefore, from 2026, the hearing will be waived in this case. The data transmitted is already known to the taxpayer as a result of the notification from the body obliged to notify.