The Federal Central Tax Office (BZSt) is responsible for collecting income or corporation tax for income with limited tax liability from service providers (individuals or companies) based in a non-cooperative territory.

Income subject to limited tax liability from service providers resident in a non-cooperative territory is:

• Financing relationships (especially interest on loans),
• insurance or reinsurance services,
• services and
• trade in goods or services.

Income or corporation tax is incurred when the remuneration accrues to the provider of the service. Upon payment of the remuneration, the recipient of the service must withhold, declare and pay the tax. The tax is withheld for the account of the provider of the service. The amount of tax withheld is 15 percent of the income, plus solidarity surcharge of 5.5 percent of the tax withheld.

You must declare the income or corporation tax via the BZSt online portal.

A tax jurisdiction is considered non-cooperative within the meaning of the law if it is listed in the so-called EU blacklist and the national Tax Haven Defense Ordinance (StAbwV).

In this case, you also have increased obligations to cooperate.