Corporations, partnerships and individuals
Corporations, partnerships and individuals, whether subject to
resident or non-resident tax liability in Germany, are required to
withhold taxes at the source on the following types of payments
and to remit such taxes to the tax authorities:
– Wage tax (Lohnsteuer) must be withheld by the employer and
remitted to the tax authorities.
– Dividends, other proft distributions, and income from a silent
partnership or proft participating loan are subject to withhold-
ing tax (Kapitalertragsteuer) at a rate of 25%. The tax rate that
is generally applicable to non-resident corporations is 15% and
refects the corporate income tax rate. Withholding tax may be
reduced, for example, according to the EU Parent-Subsidiary
Directive or to a tax treaty.
In addition, payments to non-residents are subject to taxation in
the following cases (unless modifed by a tax treaty):
– Royalty income is subject to withholding tax at a rate of 15%.
– Supervisory board fees paid to non-residents are subject to
withholding tax at a rate of 30%.
– The income from artistic, athletic, acrobatic or similar
performances performed in Germany and the income from
utilization of such performances is subject to withholding tax
at a rate of 15%.
– With certain exceptions, interest paid to non-residents is
generally not subject to withholding tax.