Expert Event

Expert Webinar


Christof K. Letzgus

Partner, StB, RA

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

Felix Hierstetter

International Tax Director

General Electric Deutschland Holding GmbH

Dirk Wilcke


PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

Dr. Annette Rickert, LL.M.

Senior Manager

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft


International Tax Highlights: Current German Tax Challenges for Non-Resident Taxpayers – to Register or Not to Register


Due to the pandemic, many companies had to focus on securing sufficient liquidity in recent months. Currently, foreign investors in Germany face additional tax liquidity risks that normally are not budgeted. In particular, this concerns the application of the non-resident taxation rules to so-called domestic registered rights. This has been of no practical relevance for over 80 years. However, without regulatory cause and coinciding with the pandemic, a discussion has arisen, if and to what extent “extraterritorial” payment transactions between foreign persons without any economic nexus should be taxable in Germany, and if so to what extent.


The discussion has evidently surprised both businesses and the tax administration and takes place at a time when Germany is trying to support an internationally coordinated approach within the OECD’s so-called “Inclusive Framework” with respect to the allocation of taxation rights. A MoF draft Bill was intended to dispel the bad ghost, but it was politically unable to reach consensus in the run-up to several state and the general elections. Instead, the MoF issued an administrative decree in order to mitigate the broadest collateral damage. However, it can only partially mitigate the issue and will not prevent a foreseeable wave of lawsuits before the tax courts. In addition to the pandemic and processing DAC6 filings, the Federal Tax Office (FTO) as well as affected companies are loaded with a considerable further administrative burden resulting from these “register cases.” Since the tax administration generally sticks to the tax withholding procedure even without cash outflow from Germany, the liquidity of companies is impacted in addition to the administrative burdens.


The issue is overlain by a planned legislative tightening of the required documentary evidence to prove an applicant’s entitlement for relief from domestic WHT under an applicable DTT under the unilateral “anti-shopping” rule, as part of the so-called WHT-Relief Modernization Act (AbzStEntlModG), expected to be enacted in May.


We will subject the hypothesis of extraterritorial taxation to a critical analysis. Furthermore, we will discuss with you possible approaches from a practical business consulting angle, taking into consideration the current status of the proceedings at the FTO and the Munich TO.


The Expert Webinar is part of the "International Tax Highlights" series organized in cooperation with the American Chamber of Commerce in Germany e. V. The event will be conducted in German and in accordance to the Chatham House Rule.


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Expert Webinar

April 21, 2021

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