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Applying for (partial) exemption from German capital gains tax for foreign corporations

Service Description

In special cases, foreign recipients (creditors) of investment income can be fully or partially exempted from capital gains tax (KapSt).

An exemption certificate can only be issued to a corporation domiciled abroad that holds a direct interest of at least 10 percent in a distributing corporation with unlimited tax liability.

Exemption from capital gains tax may be excluded in certain cases (e.g. in the case of companies with no function or substance). This regulation is therefore directed against tax arrangements that attempt to achieve relief from capital gains tax by taking advantage of treaty or directive benefits.

Please submit your application for exemption from German withholding tax on investment income in writing to the Federal Central Tax Office (BZSt).

Process flow

You must submit the application for exemption in writing to the Federal Central Tax Office (BZSt), Division St I B 3.

  • Download the application from the BZSt website. Complete the application electronically. Print it out and sign it.
  • The tax authority of the foreign country must confirm your residency.
  • Then send the application and all documents by post to the BZSt office in Bonn.
  • Your application will be processed and checked by the BZSt.
  • You will receive a certificate of exemption or a notification of rejection of your application by post.
  • If an exemption certificate is issued, the distributing corporation (debtor) may refrain from withholding tax in whole or in part from the outset if the exemption certificate is available.

Requirements

Applications can be submitted:

  • legal entities domiciled abroad
    •  that are subject to taxes on income or profit in their country of residence without being exempt and
    •  who receive investment income from domestic corporations with unlimited tax liability in which they hold a direct interest of at least 10 percent

Which documents are required?

When submitting the application, you must submit

  • appropriate power of attorney in the event that the application is submitted via an authorized representative
  • Proof of the amount of direct participation in the nominal capital of the affiliated company, for example:
  • Contracts on the acquisition of the shares or notarized current list of shareholders
  • Proof of the justification of the investment income, for example:
    • Profit participation rights agreement
    • loan agreement

What are the fees?

none

What deadlines do I have to pay attention to?

Application: The validity of the exemption certificate begins at the earliest on the day on which the application is received by the Federal Central Tax Office (BZSt)

Validity of the exemption certificate: at least 1 to a maximum of 3 years, after which a new application must be submitted

Processing duration

  • for processing the application: 3 months after complete submission of all required evidence

Legal basis

Applications / forms

  • Objection
  • Fiscal court action

Appeal

Further Information

Author

Forwarding service: Deep link to the original portal

The text was automatically translated based on the German content.

Technically approved by

Federal Ministry of Finance (BMF)

Professionally released on

15.12.2020

Source: Zuständigkeitsfinder Thüringen (Linie6PLus)

Competent Authority

Bundeszentralamt für Steuern (BZSt)

Address
An der Küppe 1
53225 Bonn, Stadt
Remark: Head office Bonn-Beuel
Link to the directions:
https://www.bzst.de/DE/DasBZSt/Dienstsitze/_docs/anfahrt_ds_bonn.html
Telephone
+49 228 406-0
Fax
+49 228 406-2661
E-Mail
Contact us
WWW
Website of the Federal Central Tax Office (BZSt)
Opening times

Monday: 09:00 - 16:00
Tuesday: 09:00 - 16:00
Wednesday: 09:00 - 16:00
Thursday: 09:00 - 16:00
Friday: 09:00 - 16:00

Further Authorities

Bundeszentralamt für Steuern (BZSt), Referat St I B 3
Address
An der Küppe 1
53225 Bonn, Stadt
Telephone
+49 228 4061200
Fax
+49 228 4063200
E-Mail
Contact us