ドイツニューズレター
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German Newsletter Law/Tax Vol. 2 | November 2022
I. Tax
I. Contents
1. Update of the simplification rule with regard to the Limited tax liability in Germany if IP is listed in German registers
1. Update of the simplification rule with regard to the Limited tax liability in Germany if IP is listed in German registers
Intro In a previous newsletter (October 2021), we introduced latest developments and a simplification rule with regard to the limited tax liability in Germany arising when Intellectual Property (“IP”) is registered in Germany (so-called “Register-Cases”). Generally, non-resident companies are limited tax liable in Germany if the income source relates to Germany. This means, income derived from e.g. renting German real estate, from the activities performed by a German permanent establishment but also derived from exploiting Intellectual Property (“IP”) in Germany are subject to limited tax liability in Germany due to the domestic nexus to Germany. However, the German Federal Ministry of Finance confirmed in 2020 that apart from establishing a domestic nexus through exploitation IP in Germany, for example by using them in a German permanent establishment, the German nexus should be fulfilled already to rights that are listed in a German public register; this may even include the European patent office located in Munich (“Register-Cases”).
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This wide interpretation meant that if for example •
a Japanese multinational group licensing IP
•
which is registered in a German register
•
to a group company in Latin America
the derived license income was taxable in Germany. With its guidance issued in 2021, the German Federal Ministry of Finance has issued a simplification rule for such Register Cases, but only for a limited period. This limited applicability of the simplification rule to past cases has been extended with a new guidance issued in June 2022. For future cases, the Federal Government has now decided in a current draft law that the regulation on Register-Cases is to be largely withdrawn. In Register-Cases, limited tax liability is to be affirmed in future only in relation to third parties having its registered seat in a non-cooperative tax jurisdiction. However, different tax treatments are to be considered in a transition period. At a glance Draft law of Federal Government Following the draft law of the Federal Government, the “Register-Cases” must be analysed separately for different time periods and depending on whether a group context is given or not. For the future Register Cases are planned to be withdrawn largely and third-party licences should be retroactively withdrawn. Please find in the following an overview:
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