With the taxation of special partner remuneration as commercial
income, Germany has adopted an exceptional position in the
Because many other countries do not
recognize special partner remuneration, qualifcation conficts
often arise with regard to the application of the relevant double
tax treaty in cases of cross-border payment by the partnership to
its partners. If the double tax treaty does not contain an explicit
regulation on special partner remuneration, then Germany
always assumes commercial income by way of a treaty override,
irrespective of the classifcation under the treaty.
In the event
of a different assessment by the other country (e. G. Interest in-
come, royalties), this may consequently result in double taxation
of income or double deduction of expenses.