On 25 January 2017, The German Federal Cabinet announced the adoption of the draft law targeting profit shifting by multinational groups through royalty payments ({News-2016-12-30/P/2- previous coverage}). The law includes measures to limit the deduction of royalty payments to related parties if the income is taxed at a rate of less than 25% as a result of the benefits of an IP regime not in compliance with the nexus approach developed as part of BEPS Action 5. The limits would also apply to …