When will MiKaDiv be implemented and what needs to be reported on?

MiKaDiv, Germany’s new digital reporting procedure which introduces new reporting requirements through the custody chain for investment income such as dividends and interests, is transforming the way investors access tax relief in Germany.  

The German Tax Authority recently reviewed the reporting regime and released updated clarifications to align it more closely with the broader EU FASTER initiative, which aims to streamline and digitise tax relief processes across member states while also combating tax abuse and fraud.  

New to MiKaDiv? Here’s a quick overview.

If you haven’t read our full article, giving the low-down on MiKaDiv, here’s a quick overview.  

MiKaDiv is Germany’s initiative to digitise and modernise how dividend withholding tax is reported. It replaces legacy, paper-based processes with a centralised digital framework aimed at improving transparency, accuracy, and fraud prevention. 

The need for reform became clear after the CumEx scandal, where billions of euros were lost due to loopholes in custody chain visibility and transaction timing. MiKaDiv addresses these vulnerabilities by enabling the German Tax Authority to track the full custody chain and dividend-related activity. 

For financial institutions, MiKaDiv signals a shift from fragmented manual workflows to a more streamlined, automated system. However, it also introduces a host of new challenges for financial intermediaries, including unfamiliar liabilities and the need to collect data that was not previously required.  

The result is a complex balancing act between achieving greater control, compliance, and operational efficiency in dividend tax reporting, while navigating the uncertainties of a changing regulatory landscape.

Strategic pause: Why MiKaDiv is now set for 2027

In a significant move for financial institutions operating in Germany, the implementation of MiKaDiv has been postponed from 2026 to 2027. While there are multiple reasons for this, a few main factors reflect a strategic effort to reduce complexity and improve alignment across EU tax initiatives. Key reasons include: 

• Implementation overlap: Financial institutions flagged concerns about having to implement MiKaDiv and then reconfigure systems again for FASTER shortly after. The delay helps avoid duplicated effort. 

• Standards harmonisation: Germany aims to align MiKaDiv’s framework – including report structure and format – with FASTER, as well as introducing harmonised data elements for dividend payments, transaction details, beneficial owner data, and so on.  

• Industry feedback: Lobbying from financial industry groups prompted calls for clearer guidance on MiKaDiv’s reporting requirements, particularly for complex cross-border arrangements. 

• Digital readiness: Following the July 2024 launch of DIP Kafe e-filing, there were doubts about whether the infrastructure would be fully ready to support MiKaDiv by 2026. 

What MiKaDiv requires: A closer look at the reporting framework

MiKaDiv introduces a robust set of data requirements designed to enhance transparency and traceability across the custody chain. But beyond compliance, MiKaDiv is fundamentally a data exercise.  

Financial intermediaries will need to collect new data elements from their customers (and from customers of their customers), report high volumes of transaction data, and assess complex financial arrangements.  

Here’s what financial institutions will need to report: 

• Beneficial Owner and Account Data: Institutions must identify the actual investor behind each dividend payment, including personal and account-level details. This ensures tax relief is granted to the correct party and helps prevent misuse of omnibus accounts. 

• Custody Chain and LEI Information: The full custody chain – from issuer to investor – must be disclosed, including Legal Entity Identifiers (LEIs) for all intermediaries. This enables the BZSt to trace the flow of securities and income through each layer of custody. 

• Securities and Income Data: Detailed information about the securities involved (e.g., ISINs, dividend amounts, payment dates) must be reported to ensure accurate tax calculation and validation of income events. 

• Transaction Details Including Pre- and Post-Dividend Activity: Institutions must report relevant transactions surrounding the dividend event, such as acquisitions, disposals, financial arrangements, and corporate actions. This helps verify entitlement and prevents arbitrage or misuse of tax relief mechanisms. 

• UUID Generation and Exemption Reports: Each submission must include a Universally Unique Identifier (UUID) to track reports and corrections. Exemption reports must also be filed where applicable, indicating whether tax relief was granted and under what conditions. One submitted and accepted, Tax Certifications will be issued with a corresponding UUID, which is then required to submit reclaim applications electronically.

Are you MiKaDiv ready? 

While the delay to 2027 offers more time to prepare, MiKaDiv remains a critical milestone in Germany’s journey toward digitalised, harmonised tax reporting. Financial institutions should use this window to assess data readiness, engage with industry groups, and align internal systems with both MiKaDiv and FASTER requirements.

The future of tax reporting in Europe is digital, transparent, and interconnected – and MiKaDiv is a key piece of that puzzle. 

Xceptor: Powering MiKaDiv compliance with confidence

This is new, intricate, and places data collection and distribution at the heart of the challenge. Having a robust tax data module, where data sources are clearly mapped and flows are streamlined into the correct formats, is essential. And that’s exactly where Xceptor excels. 

As a trusted partner to 8 of the top 10 global custodians, Xceptor is uniquely positioned to support the operational demands of MiKaDiv. Whether you're a foreign intermediary transmitting data across the custody chain or a German agent reporting directly to the tax authority, our platform ensures seamless, secure, and compliant data exchange. 

With proven expertise in German e-filing and deep integration capabilities with the BZSt, Xceptor automates the complexity so you can focus on readiness, accuracy, and scale. 

Preparing for MiKaDiv? Let’s talk. Our team is ready to help you meet the deadline with confidence and show how existing clients are already ahead of the curve.