Draft bill to amend the Tax Consultancy Act: Sudden end to hype for financial investors?
On August 19, 2025, the Federal Ministry of Finance published a draft bill for a Ninth Act Amending the Tax Consultancy Act (StBerG), which, among other things, proposes an amendment to Section 55a StBerG. This amendment, which at first glance appears insignificant, could make it considerably more difficult in future for financial investors to participate in tax consulting companies in the manner that has been common practice to date.
1. Previous legal situation: Indirect holdings despite prohibition on third-party ownership
The prohibition on third-party ownership and participation in Section 55a (3) StBerG currently prohibits "third parties outside the profession" from participating in tax consulting companies, either directly or indirectly. Nevertheless, numerous financial investors use multi-level structures for indirect participation, for example via a foreign EU auditing company that is a shareholder in a German auditing company. Under current law, the latter can in turn be a shareholder in a tax consulting company.
Since Section 55a StBerG currently only applies to directly participating companies, it is not necessary for the (foreign) companies higher up in the structure to meet the requirements of a tax consulting company under German professional law. It is precisely the absence of a prohibition on third-party ownership in other EU countries that enables financial investors to enter the German market.
2. Content and objective of the draft bill
The new sentence to be inserted in Section 55a (1) sentence 2 StBerG reads as follows:
"In the cases referred to in sentence 1, numbers 3 and 4, the company involved must fulfill the recognition requirement of Section 53 (2) sentence 1, number 1."
Section 53(2) sentence 1 no. 1 StBerG stipulates that both the professional practice company and its shareholders and executive bodies must meet the requirements of Sections 49, 50, 51(5), 55a, and 55b StBerG – including the prohibition on third-party ownership.
Specifically, this means:
- In future, the auditing/tax consulting company involved must itself meet all the professional requirements that apply to tax consulting companies – in particular with regard to the shareholder structure.
- Their shareholders must also meet these requirements in future, regardless of whether they are domestic or foreign companies.
- EU audit firms would only be permitted if they themselves (and their shareholders) also meet the requirements of the StBerG – which is not usually the case.
This would effectively put an end to the indirect participation via EU structures that is currently practiced. According to page 99 of the explanatory memorandum to the draft bill, the aim of this amendment is to clarify existing ambiguities in practice regarding the interpretation of Section 55a (1) sentence 2 StBerG:
"In order to preserve independence, the participation of a company in a tax consulting professional practice should only be possible within narrow limits."
3. Practical implications
The implementation of this draft bill would mean a significant restriction of previously permissible structuring models in practice. Investments by investors via multi-level structures, in which companies that do not meet the requirements of the StBerG are located at the upper investment level, would be inadmissible in the future.
The draft does not provide for explicit protection of existing structures. However, due to constitutional protection of legitimate expectations, there is likely to be de facto protection for already recognized professional service companies. However, it cannot be ruled out that chambers of tax advisors will subject existing investment structures to renewed scrutiny, particularly in the event of changes in the group of shareholders. In such cases, there is a risk of revocation of recognition pursuant to Section 55 (3) No. 1 StBerG.
4. Conclusion and outlook
The draft bill to amend the Tax Consultancy Act contains plans for far-reaching changes aimed in particular at curbing indirect shareholdings by financial investors in tax consultancy firms. If the plan is actually implemented, holdings in affected corporate structures via multi-level companies would have to be reviewed and, if necessary, adjusted in order to avoid professional liability risks, particularly in connection with recognition and grandfathering.
It remains to be seen to what extent the legislature will include clarifications on the treatment of existing structures or an explicit transitional provision in the further proceedings.
