Tax assessment procedure and withholding
procedure
With respect to non-resident taxpayers, tax is levied either by
means of an assessment procedure or by withholding tax at the
source.
In principle, both non-resident and resident taxpayers have to fol-
low the same rules in the assessment procedure. However, for
non-resident taxpayers only German-source income is subject
to tax.
Consequently, costs of earning non-business income and
business expenses may only be deducted to the extent they are
economically related to the German-source income.
Under the withholding procedure, the debtor of the remuneration
withholds tax for the account of the taxpayer and remits it to the
tax office.
As a general rule, withholding tax accrues upon pay-
ment of the corresponding remuneration. Withholding tax at the
source is fnal. Due to numerous exceptions, assessment tends
to be obligatory, however.
EU Forecast
euf:ba.18g:54/nws-01