"Foreign-to-foreign licensing subject to withholding tax in Germany?"

A provision of the German Income Tax Act dated 1925 leads to the "odd" situation that foreign-to-foreign licensing can be subject to German withholding tax, if the IP is registered with a public German register. We just found out in 2020, almost 100 years later!

Foreign owners of German-registered IP have to act now! The proposed amendment of the respective provision did not find its way into the legislative process, as the Federal Government refused it. German tax authorities are currently working on additional guidance and have set up a task force to identify relevant cases.

In the article on the famous Kluwer International Tax Blog, WTS experts Alexander Haller, Johannes Suttner and Leon Zimmermann describe the implications of the questionable German provision.

Click here to read the entire article