Client Briefing | April 2026
Executive Summary
- The German Bundestag has adopted the 9th amendment to the German Tax Advisory Act (StBerG). While framed as a “clarification,” the reform in substance represents a material tightening of the restrictions on investor participation, extending regulatory scrutiny across the entire ownership chain.
- The new rules will enter into force immediately upon promulgation (expected late June / early July 2026), i.e. well ahead of the general effective date (1 September 2026). There is effectively no transition period.
- The legislation provides no explicit grandfathering or transitional regime.
- Increased regulatory scrutiny of existing structures is expected; revocation proceedings cannot be ruled out.
- Audit firm (WPG) structures currently represent the most robust and scalable structuring option for investor participation in Germany.
Regulatory Direction: Clarification or De Facto Tightening?
With the latest amendment to the StBerG, the German legislator has taken a decisive step affecting investor participation in the tax advisory sector.
While the entry of private equity and other financial investors into the market has accelerated significantly in recent years, the legislative response is not one of liberalisation, but of structural restriction.
Although the official rationale refers to a “clarification” of existing rules, this characterisation is difficult to sustain. The reform goes materially beyond the previous framework by explicitly capturing indirect shareholdings, thereby extending regulatory scrutiny across multi-tier structures.
What was previously a regime focused on direct shareholders is now transformed into a full look-through system, effectively targeting investor-driven platform models.
For investors, this marks a fundamental shift in the regulatory baseline.
Core Mechanism: Look-Through Rule and Enhanced Enforcement
Look-Through Rule (§ 55a(1) sentence 3 StBerG)
At the heart of the reform is the introduction of a statutory look-through approach.
In practical terms: Where a German audit firm (WPG) or public audit firm (BPG) holds shares in a German tax advisory firm, not only the WPG/BPG itself, but all entities directly or indirectly holding interests in it must meet the professional eligibility requirements under German tax advisory law.
This extends regulatory scrutiny all the way up to the ultimate investor.
New Notification Obligations (§ 76e StBerG)
The reform is complemented by extensive new notification requirements.
Any direct or indirect change in the shareholder structure must be reported without undue delay to the competent chamber.
Combined with the look-through rule, this creates a significantly enhanced enforcement framework, enabling regulators to systematically identify and challenge non-compliant structures.
Accelerated Entry into Force
The relevant provisions will become effective immediately upon promulgation, rather than as part of the general implementation timeline.
For existing structures, this leaves very limited time for reactive restructuring.
Market Reality vs. Regulation: A Structural Tension
The reform intervenes in a market undergoing significant structural change.
Succession issues, increasing regulatory complexity, digitalisation requirements and capital constraints have driven a clear trend towards consolidation and platform strategies, often backed by private capital.
The legislator is therefore not regulating a static environment, but a market in transition.
The result is a structural tension:
the market requires capital and consolidation, while regulation restricts precisely these dynamics.
No Real Transitional Regime: Grandfathering as a Key Uncertainty
One of the most critical aspects of the reform is the absence of any explicit grandfathering or transition provisions.
From a legal perspective, there are strong arguments that existing structures may benefit from constitutional protection (in particular under property rights principles).
Investments in platform structures typically constitute protected economic positions. Interference through revocation of regulatory approval may qualify as retroactive interference, which—under German constitutional law—requires careful justification and typically transitional safeguards.
Against this backdrop, it is arguable that investors could legitimately rely on the previous legal framework, particularly given the lack of a clear and consistent legislative trajectory.
However:
Even if such protection applies, its practical effect is likely to be limited.
- Existing structures may effectively be “frozen”
- Changes to ownership (including exits or refinancing) may become significantly constrained
Regulatory Enforcement: Revocation as a Realistic Scenario
Regulatory enforcement is expected to increase materially.
The competent tax chambers are likely to review existing structures and initiate proceedings where necessary.
In practice:
- Proceedings typically begin with a formal objection and remediation period
- The administrative phase alone may take several weeks or months
- Subsequent litigation may extend over multiple years
Importantly, enforcement of revocation is generally suspended until final resolution, allowing continued operations during the process.
For investors, this creates a strategic window: Existing platforms remain operational, allowing for orderly restructuring or opportunistic acquisitions.
Strategic Response: Shift Towards WPG Structures
A clear market response is already emerging.
Many investors are evaluating a conversion of existing platforms into German audit firms (WPGs).
The rationale is straightforward:
- The tightening applies to the StBerG, not to the WPO (audit firm regime)
- WPGs are legally permitted to provide tax advisory services
- The regulatory framework for WPGs remains structurally more accommodating
In the current environment, WPG structures are not merely an alternative—they are increasingly becoming the default structuring solution for investor-backed platforms in Germany.
Will the Audit Firm Regime (WPO) Remain Stable?
A key question for investors is whether similar restrictions could be extended to audit firms.
At present, there are strong arguments against such a development:
- The WPO framework is anchored in EU law, in particular the Audit Directive (Directive 2006/43/EC)
- Participation by EU/EEA audit firms is explicitly protected at EU level
- Any meaningful tightening would likely require legislative action at EU level
In addition:
- The German audit regulator (WPK) has historically taken a more pragmatic stance towards investor participation
- The professional body (IDW) has emphasised that independence concerns are already addressed through existing regulatory mechanisms, including comprehensive quality management systems
Based on current developments, a near-term tightening of the WPO regime appears unlikely.
The Market Remains – but Structuring Becomes Critical
The reform does not close the German market to investors—but it fundamentally changes how investments must be structured.
From an investor perspective:
- WPG structures are emerging as the most robust entry route
- Traditional tax advisory platform models face increasing regulatory pressure
- Existing investments may become structurally constrained, particularly in exit scenarios
- Litigation around grandfathering is likely, potentially over several years
- At the same time, distressed and special situation opportunities may arise
The key question is no longer whether to invest—but how to structure the investment.
Investors who anticipate regulatory developments early and implement robust, WPO-compliant structures will continue to find attractive opportunities in the German market.
