In accordance with the EITI standard, cash flows from the extractive industry must be taken into account if they are regarded as significant for a complete presentation of the company payments and state revenues. The following cash flows are recorded within the framework of the first D-EITI report or are subject to the payment reconciliation with the revenues of the government agencies (read more).


Corporation tax

Corporation tax is the main income tax of limited companies in Germany; it is not a specific tax for extractive industry companies, but is levied on all limited companies that are domiciled in Germany or are active in the country. The assessment basis for corporation tax is the taxable commercial income, which is derived from the annual net profit; any tax modifications that may apply are also considered. If an enterprise is also active in other sectors as well as in the extractive sector, there may be delimitation problems regarding the share of corporation tax attributable to the activities in the extractive sector, since the corporation tax is calculated on the basis of the total taxable income ( read more ).

For this reason, corporation tax is classified as a non-project-related payment in the payment reports to be prepared under commercial law. Allocation of these payments to activities within and outside the extractive sector can be selectively carried out by companies if a proper and reliable coding (based on appropriate allocation criteria) is possible. This commercial practice is pursued for the purposes of EITI reporting.

Trade tax

Commercial enterprises in Germany are subject to trade tax. The municipalities in which the company in question has its operating facilities are entitled to levy trade tax; an operating facility may also extend across several municipalities. Payment recipients for trade tax payments are neither the Federal Government nor the Federal States in a central role, but the relevant individual municipalities; this in itself is a reflection of the Federal State structure in Germany ( read more ) – however, the many municipalities pose special challenges for payment reconciliation in terms of trade tax18. In addition to this, individual municipalities – unlike the individual tax offices in the case of corporation tax – cannot be centrally addressed via an organisational unit .

Just which government agencies – and how many of them – receive trade tax payments cannot be foreseen. This information can only be provided by the companies themselves within the framework of the data collection process.

Against this background, the MSG has therefore decided to include the trade tax payments of the companies in the data collection framework and to present these in the current EITI report; however, a general payment reconciliation for the first D-EITI report will not be included. The reconciliation of trade tax payments with the revenue of the municipalities as recipients will instead be exemplarily demonstrated by the payment data of one company that participates in the reporting process and which represents all the other participating companies. Esco – european salt company GmbH & Co. KG, Hanover, a company of the K+S Group headquartered in Kassel, was willing to represent this exemplary trade tax payments reconciliation. For further details and the results of this payment reconciliation of the trade tax payments, please see the explanations here.

Particularities with regard to the recording of tax payments in certain parent-subsidiary constellations

Business partnerships such as the GmbH & Co. KG traditionally play a leading role in Germany’s small and medium-sized enterprises, in contrast to many other jurisdictions. They are subject to trade tax, but not to corporation tax. Corporation tax is first levied at shareholder level, but only if the shareholder is a limited company. In this respect, one special feature of the German tax law should be noted, according to which business partnerships are not themselves the subject of taxes in terms of income tax; the income generated by the company is subject to taxation at the level of the shareholders, together with the income they have earned from other sources.

In the subsidiary-partnership constellation of a parent limited company, consequences may arise for the recording of the tax payments (trade tax and corporation tax) within the framework of data collection for the EITI report; examples of such consequences are shown below. In each case, it is assumed that a company has voluntarily participated in the data collection for the EITI report if it is active in the natural resources extractive industry.

If both the parent limited company and the subsidiary business partnership are active in the natural resources extractive industry, all the relevant tax payments (trade tax of the subsidiary and the parent company as well as corporation tax at the parent company level) are recorded in the EITI report. If, on the other hand, the subsidiary or parent company is not active in the natural resources sector, either not all or too many tax payments to government agencies are recorded. If, for example, the parent limited company is active in the extractive industry, but the subsidiary-business partnership is not, the reported corporation tax payments of the parent company also include the financial results of the subsidiary. From the viewpoint of commercial law, it is possible (but not obligatory) to allocate corporate tax payments to activities both within the extractive sector and outside of it. If, on the other hand, the subsidiary-business partnership is active in the natural resources extractive industry, but the parent limited company is not, trade tax payments are only recorded for the subsidiary through the subsidiary’s (sole) participation in the data collection, but not, the corporation tax paid by the parent limited company (on a pro rata basis) for the financial results of the subsidiary.

This handling of corporation tax is due to the German tax system. The MSG has decided to pursue this legal, tax-related standpoint, also for EITI purposes.

Particularities with regard to recording the tax payments of consolidated tax groups

German tax law has specific special arrangements in the case of trade tax and corporation tax for corporate groups. Under certain conditions, a so-called ‘consolidated tax group’ may exist.
In constellations like this, the incorporated companies (subsidiary organisations), which are themselves limited companies do not usually pay tax; the payment of taxes levied on the financial result of all the companies incorporated in the consolidated tax group is carried out entirely and exclusively by the parent company. The parent company in turn pays taxes on its own income and on the income of its subsidiaries, which may not exclusively result from activities related to the extraction of natural resources.

For the purposes of the (consolidated group) payment report under German commercial law, the following differentiations are made at the level of the parent company:

  • If the consolidated tax group is mainly active in the extractive industry pursuant to § 341r No. 1 of the HGB, reporting can be carried out for the total amount of the taxes paid by the parent company. There is no obligation to allocate the tax payments to activities within or outside the scope of § 341r No. 1 of the HGB.
  • If, on the other hand, the consolidated tax group is not mainly active in the extractive industry as set down in §341r No. 1 of the HGB, the tax payments made by the parent company may be allocated on a voluntary basis. Otherwise, details of the tax payments made by the parent company will be omitted.

The results of the payment reconciliation substantiate the major practical importance of consolidated tax groups in the taxation of groups of companies. In various cases concerning the companies participating in the payment reconciliation, details of the taxes paid by the parent company are consequently omitted (see the figures on the results of the payment reconciliation here).

With regard to the recording of tax payments within the framework of consolidated tax groups, the MSG has also opted to pursue the viewpoint according to German commercial law for EITI purposes.

Minesite and extraction royalties pursuant to the BBergG

Minesite and extraction royalties are levied as a specific tax on extractive companies for free-to-mine natural resources, based on the German Federal Mining Act (§§ 30, 31 BBergG) (for further details see here ).

The MSG has decided to include minesite and extraction royalties in the EITI report as a cash flow and (in addition to corporation tax) to make these royalties subject to payment reconciliation.

Lease payments

Minesite and extraction royalties are the only taxes that are levied for the exploration and extraction of free-to-mine natural resources in Germany. However, lease payments may have to be made to government agencies in connection with the extraction of non-free-to-mine natural resources, particularly in the quarried natural resources sector, and this is indeed the case when government agencies (as owners) conclude contracts for the extraction of natural resources with extractive sector companies. Such contractual arrangements may include fixed payments or payments that depend on the quantity extracted, or a combination of both variants.

The recipients of the lease payments are the government agencies that have concluded the contractual arrangements with the company (e.g. municipalities, forestry offices, as well as state property administration and moor management authorities). The content and the number of contracts are not centrally documented ( read more ). In addition, the individual government agencies which have concluded lease contracts – unlike the individual tax offices in the case of corporation tax – cannot be centrally addressed via an organisational unit. As in the case of trade tax, this leads to particular difficulties in payment reconciliation.

Just which government agencies – and how many of them – receive lease payments cannot be foreseen. This information can only be provided by the participating companies themselves within the framework of the data collection process.

The MSG has therefore decided to record payments made to government agencies by the companies within the framework of the data collection process, but to exclude them from payment reconciliation. By way of example, and in keeping with the trade tax payments, the MSG originally intended to have the Independent Administrator reconcile the leasing payments made by one participating company as a representative example for all other participating companies. However, this exemplary reconciliation has not yet come to fruition.

Zahlungen für die Verbesserung der Infrastruktur

Der Zahlungsstrom entspricht der gesetzlichen Regelung des (Konzern-)Zahlungsberichts in § 341r Nr. 3 g) HGB. Die Zahlungen wurden erstmalig für den vorliegenden zweiten deutschen EITI-Bericht erhoben und die Datenmeldungen an die teilnehmenden Unternehmen insofern ergänzt. Die gemeldeten Zahlungen umfassen generell Maßnahmen der Unternehmen zum Ausgleich für Eingriffe in Natur und Landschaft wie z. B. Zahlungen zur Förderung von kommunalen Investitionen oder Bildungseinrichtungen oder für die Schaffung bzw. Instandhaltung von öffentlicher Infrastruktur. Inhalt und Zusammensetzung der gemeldeten Zahlungen wurden auf Wunsch der MSG analog zum ersten D-EITI Bericht durch den Unabhängigen Verwalter näher analysiert und die Ergebnisse der MSG vorgestellt. Die Ergebnisse zeigen eine hohe Heterogenität der erfassten Zahlungen als Folge der Vielfalt an Maßnahmen, die im Zusammenhang mit dem Ausgleich von Einwirkungen aus dem jeweiligen Bergbaubetrieb getätigt werden.

Ausgestaltung des Projektbegriffs

Der EITI-Standard sieht grundsätzlich eine Berichterstattung auf Projektebene vor (EITI-Anforderung 4.7). Die MSG hat sich dazu entschieden, Inhalt und Umfang des Projektbegriffs in analoger Anwendung der gesetzlichen Regelung des § 341 r Nr. 5 HGB umzusetzen. Zahlungen an staatliche Stellen sind danach grundsätzlich je Projekt anzugeben, wenn das berichtende Unternehmen im Berichtszeitraum mehr als ein Projekt betrieben hat. Der Begriff des Projekts wird in § 341 r Nr. 5 HGB konkretisiert als die Zusammenfassung operativer Tätigkeiten, die die Grundlage für die Zahlungsverpflichtungen gegenüber einer staatlichen Stelle bilden und auf einem Vertrag, einer Lizenz, einem Mietvertrag, einer Konzession oder einer ähnlichen rechtlichen Vereinbarung beruhen. Für die Zahlungsströme „Körperschaftsteuer“ und „Gewerbesteuer“ ist damit generell keine projektbezogene Berichterstattung vorgesehen, da es sich um Zahlungsströme handelt, die auf einer gesetzlichen Regelung und nicht auf Basis einer der in § 341 r Nr. 5 HGB genannten rechtlichen Vereinbarung beruhen. Für den Zahlungsstrom „Feldes- und Förderabgaben“ ist mit der Angabe des entsprechenden Erlaubnis-/ Gewinnungsgebietes im Rahmen der Datenmeldung eine hinreichende Bestimmbarkeit des jeweiligen Projektes sichergestellt. Hinsichtlich der Pachtzahlungen und der Zahlungen für die Verbesserung der Infrastruktur sehen die Vorlagen zur Datenerhebung eine Aufteilung der Zahlungen auf Projekte je staatlicher Stelle vor.

Materiality of payments

The commercial regulations for the preparation of (consolidated group) payment reports stipulate that the companies concerned must report payments of €100,000 and upwards made to individual government agencies per reporting year (cf. § 341t(4) of the HGB). A government agency to which less than €100,000 has been paid during the reporting period does not have to be included.

The MSG has decided to adopt these rules for the first D-EITI report.
If payments made during reporting year 2016 amounted to less than €100,000 per government agency, the data collection templates require relevant proof of the existence of payments, but without mentioning any specific amounts.

Bezüglich der Gewerbesteuer hat die MSG für den zweiten D-EITI Berichts entschieden sämtliche durch die Unternehmen gemeldeten Gewerbesteuerzahlungen, die einen Betrag von 2,0 Mio. Euro je staatlicher Stelle überschreiten, einem Abgleich zu unterwerfen. Diese Entscheidung der MSG beruht auf den im zweiten D-EITI Bericht in Kapitel 11.a.iii. dargestellten Besonderheiten bzw. Herausforderungen, die mit dem Abgleich der Gewerbesteuerzahlungen verbunden sind.


In Federal States in which legislation does not include an excavation law and the State-level Nature Conservation Law does not apply to the extraction of non-energetic, ground-based natural resources in the context of dry excavations, this type of natural resource extraction falls within the scope of the relevant state building regulations.

Legal limitations also exist: State building regulations apply to the excavation of solid rock (limestone, basalt, etc.), for example, in quarries with an area of up to 10 hectares (ha) in which no blasting is carried out. In the event that this area is exceeded, or if water bodies are formed after completion of the extraction operations, the German Federal Immission Control Act (BImSchG) and/or Water Resources Act (WHG) are applicable.
In Bavaria and North Rhine-Westphalia, the above-ground excavation of non-energetic, ground-based natural resources in the context of dry excavations is determined at state level by the existing excavation laws (AbgrG). For the excavation of solid rock (limestone, basalt, etc.) in quarries where blasting does not occur, the AbgrG applies to sites with an area of up to 10 ha. In the event that this area is exceeded, or if water bodies are formed after completion of the extraction operations, the German Federal Immission Control Act (BImSchG) and/or Water Resources Act (WHG) are applicable. In the other Federal States, this type of natural resources extraction is regulated by the respective state building regulations or by the state-level nature conservation laws.

In general, the AbgrG applies to those raw materials the excavation of which is not directly subject to mining law or the mining authorities. These raw materials include (in particular) gravel, sand, clay, loam, limestone, dolomite and other rocks, bog mud and clays. However, the jurisdiction between AbgrG and mining law can vary from case to case in the case of certain raw materials, such as quartz gravels. The requested authority must always verify its own jurisdiction in each case. The AbgrG also encompasses surface area usage and the subsequent rehabilitation of the area.
The German Federal Immission Control Act (BImSchG) is the most important and practice-relevant law in the field of environmental law. It constitutes the basis for the approval of industrial and commercial installations. In the natural resources extraction industry, quarrying companies must have approval to extract stones and earth. Every quarrying area of 10 hectares or more must undergo a full approval procedure, including public participation and UVP (environmental impact assessment). A more simplified approval procedure is used for quarrying areas of less than 10 hectares.

The sphere of responsibility for the legal immission control approval procedure is fully specified in the Immission Control Acts of the Federal States. The Federal States are tasked with the administrative enforcement of the approval procedure. Each individual state’s Environment Ministry – the highest local immission protection authority – usually bears the responsibility for this procedure. Subordinate authorities include regional councils, district authorities and lower-level administrative authorities. Administrative jurisdiction generally lies with the lower-level administrative authorities.
The GDP measures the value of goods and services produced domestically (creation of value) within a given period (quarter, year). The Federal Office of Statistics calculates the GDP as follows: production value minus intermediate consumption = the gross value added; plus taxes on products and minus subsidies = GDP
The gross value added is calculated by deducting intermediate consumption from the production values, so it only includes the value added created during the production process. The gross value added is valued at manufacturing prices, i.e. without the taxes due (product taxes), but including the product subsidies received.

During the transition from gross value added (at manufacturing prices) to GDP, the net taxes (product taxes less product subsidies) are added globally to arrive at an assessment of the GDP at market prices’. Source: Destatis
The planning approval procedure under mining law is used for the approval procedure of a general operating plan for projects which require an environmental impact assessment (§§ 52(2a), in conjunction with 57 a of the BBergG).
There are different definitions and methodological approaches at the international as well as at the national level as to what subsidies are and how they are calculated. According to the definition of the German government’s subsidy report, this report considers federal subsidies for private companies and economic sectors (ie grants as cash payments and tax breaks as special tax exemptions) which are relevant to the budget. Subsidies at the federal level can be viewed via the subsidy reports of the federal states (see Appendix 5 of the German government subsidy report).
In compliance with § 68(1), Water Resources Act (WHG), the excavation of landowners’ natural resources such as gravel, sand, marl, clay, loam, peat and stone in wet extraction operations requires a planning approval procedure. The reason for this is that groundwater is exposed in wet extraction, resulting in above-ground water. The planning approval procedure is implemented by lower-level water authorities.

The procedural steps of the planning approval procedure are governed by the general provisions of §§ 72 to 78 of the Administrative Procedures Act (VerwVfG). Within the meaning of § 68(3), nos. 1 and 2 of the WHG, the plan may only be established or approved if an impairment of the common good is not to be expected and other requirements of the WHG as well as other public-law provisions are fulfilled.