Tax withholding obligations for cross-border royalties

The payment of license fees to foreign companies is often subject to tax deduction in accordance with Section 50a of the German Income Tax Act (EStG). In order to classify the tax deduction, the right being transferred must be examined in detail. In other words, what type of right is being transferred and is it economically a so-called purchase of rights? These aspects have a significant impact on the tax deduction obligation. If the German company does not make this tax deduction or does not make it correctly, it is liable for this tax deduction. In this training , you training the essential aspects of the tax deduction obligation for license fees under Section 50a (1) No. 3 EStG and receive practical guidance on the correct application and completion of relevant tax forms. This will enable you to independently classify remuneration as subject to tax deduction and declare it to the tax authorities. Furthermore, you will avoid potential disputes with foreign contractual partners regarding tax liability and the amount of remuneration in advance.