Germany

Resident corporations paying certain types of income are required to withhold tax as shown in the following tables. There is also a solidarity surcharge of 5.5% on the tax due.

General

Notes

1. Corporate recipients of dividend and interest income (interest on convertible and profit-sharing bonds) can apply for refund of the tax withheld over the corporation tax rate of 15% plus solidarity surcharge, regardless of any further relief available under a treaty.
2. Generally, only interest paid by banks to a resident is subject to a WHT. A 25% tax plus solidarity surcharge is also withheld from income on convertible or profit-sharing bonds.
3. Interest paid to non-residents other than on convertible or profit-sharing bonds and over-the-counter transactions is generally free of WHT. Tax on loans secured on German property is not imposed by withholding, but by assessment to corporation tax at 15% (plus solidarity surcharge) of the interest income net of attributable expenses. The tax authorities can order a WHT of 15.825% (including solidarity surcharge) if ultimate collection of the tax due is in doubt. Both forms of tax are reduced by treaty relief.
4. Where the EC Parent/Subsidiary Directive applies, dividends paid by a German company to a qualifying parent company resident in another EU member state are exempted from German WHT. The minimum shareholding is 10%, to be held continuously for at least one year.
5. The EC Interest and Royalties Directive exempts payments from WHT if made to an associated company in another EU member state. The association must be through a common shareholding of at least 25%.

Treaty rates

Notes

1. Corporate recipients of dividend and interest income (interest on convertible and profit-sharing bonds) can apply for refund of the tax withheld over the corporation tax rate of 15% plus solidarity surcharge, regardless of any further relief available under a treaty.
2. Generally, only interest paid by banks to a resident is subject to a WHT. A 25% tax plus solidarity surcharge is also withheld from income on convertible or profit-sharing bonds.
3. Interest paid to non-residents other than on convertible or profit-sharing bonds and over-the-counter transactions is generally free of WHT. Tax on loans secured on German property is not imposed by withholding, but by assessment to corporation tax at 15% (plus solidarity surcharge) of the interest income net of attributable expenses. The tax authorities can order a WHT of 15.825% (including solidarity surcharge) if ultimate collection of the tax due is in doubt. Both forms of tax are reduced by treaty relief.
4. The lower rates on dividends apply under certain conditions (minimum shareholding, specific shareholders, in some cases minimum holding period).
5. The treaty does not limit the taxation of certain profit-based interest income, which is deducted by the debtor from their tax base; consequently, the domestic rate (plus solidarity surcharge) applies.
6. The USSR treaty continues in force with Moldova.
7. The applicable maximum WHT rate on royalties depends on the type of royalty granted (film and television royalties, trademarks, patents, franchises, etc.).
8. The lower rate on interest income applies under certain circumstances (e.g. for certain recipients, such as banks or pension funds, or for interest paid in connection with certain purchases on credit).
9. The Yugoslav treaty continues in force with Bosnia-Herzegovina, Kosovo, Montenegro, and Serbia.
10. The dividend exemption applies under certain conditions to corporate shareholders with at least 80% throughout the previous 12 months.
11. The Czechoslovak treaty continues to apply to the Czech Republic and to Slovakia. Interest on profit-sharing bonds is taxed as a dividend.
12. Treaty expired on 31 December 2021.
13. The lower rate applies to royalties paid for the use of industrial, commercial, or scientific equipment.
14. The treaty is not applicable for the years 2024 onwards to the extent that German taxing rights are limited due to the treaty. This is due to the treaty override in Section 1 (3) of the Tax Haven Defence Act (Steueroasenabwehrgesetz), see the Other issues section.

Treaties or protocols amending existing treaties have been signed but await ratification with Austria, Bulgaria, Latvia, Lithuania, Luxembourg, Oman, and South Africa.