The German legislator had the obligation to implement the amended Parent-Subsidiary Directive and the Directive on a Common System of Taxation Applicable to Interest and Royalty Payments made Between Associated Companies of Different Member States. With the EU Directives Implementation Bill (EU-Richtlinien-Umsetzungsgesetz) dated 9 December 2004 and the EU Administrative
Assistance Adjustment Bill (EG-Amtshilfe-Anpassungsgesetz) dated 2 December 2004 he complied with this obligation. These tax acts, however, include also other provisions, which are important for enterprises, e.g. the treatment of prepayments of business expenses. Furthermore in respect of the Manninen case, Section 175 of the General Fiscal Code has been amended, in order to avoid the obligation to credit foreign corporate tax. The following article will give an overview of the important changes in German tax law concerning the taxation of enterprises, which entered into force at the end (and partly retroactively at the beginning) of 2004.