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Thread: Withholding tax and double taxation agreement with Germany

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    Angry Withholding tax and double taxation agreement with Germany

    My company did work for a German state owned enterprise (invoiced for licence fees) and my client told me there is a "Double Taxation Convention between Germany and South Africa and the total amount of the license fees will exceed the 5,000 € gross per calendar year (counting with the next invoice), we will need a certificate of exemption according to this Double Taxation Convention in order to avoid the German tax authorities withholding 15,83% income tax of the gross amount (like described in the contract).

    So I got the document and completed it and basically just need SARS to verify it so I can send a copy to Germany.

    However, after 4 months with SARS and going to the tax exemption office, multiple hours spent on the phone with SARS nobody can help me.

    Any suggestions?

    Asking the German tax office, they came back in 1 day with the following:

    You have paid withholding tax for licensing fees.
    You can claim within four year for a refund. In this case you msut send us the application vi normal letter post. Please find the form UK-Language version (not EU/EEA) on our website

    The application is attached as PDF-file.

    With the same application you can claim for an exemption in the future.

    In general, the certificate of residence (date, stamp and signature from your local tax office) must be issued on the application.
    If the competent tax authority refuses to issue a confirmation on the official form, a written confirmation from the competent tax authority of the country of residence shall be deemed to have been duly issued if it contains the information required under the officially prescribed form with regard to section 50d(4) sentence 1 EStG (new: § 50c Absatz 5 Satz 2 EStG) .
    The following documents must be filed when claiming an exemption or refund:
    • A preprinted written application, completed and then signed in the payee’s own hand (an unsigned application is invalid).
    • The power of attorney for duly authorized agents
    • Residency certificate on the preprinted application.
    • Copy of the contract
    • For refunds: the original tax certificate issued by the payer (Section 50a (5) Sentence 6 EStG)
    (the tax certificate will have to be certified by the tax office that has jurisdiction over the payer if the payee derived the remuneration on or before 31 December 2013)
    • In refund cases where the refund is to be disbursed to someone other than the payee or applicant: an original document issued by the payee authorizing the document holder to collect the refund
    If the applicant is an entity, the following additional documents will have to be submitted along with the application in order to run a tax evasion check pursuant to Section 50d (3) EStG:
    • Commercial register excerpt
    • Organizational chart (with information on the ownership structure and shareholding percentages)
    • Balance sheet and profit-and-loss account for the applicable financial year
    • The BZSt may request additional documentation that it needs to conduct the review.

    In kind of further questions you can reach us also via phone from Monday to Friday from 8 am to 4 pm.
    Last edited by Dave A; 29-Jul-22 at 07:19 AM. Reason: fixed broken URL

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