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ARTICLE · 21 MARCH 2019

Update: Positive Shift Regarding Withholding Tax On Online Advertising

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In February 2019, the tax authorities caused uncertainty with their view that a withholding tax of 15.825% should be retained by domestic clients of foreign providers on fees paid for online advertising (cf. Client Information of Feb 14 2019).

GermanyTax
Dr. Andreas Rodin
Dr. Andreas Rodin
Nico Fischer
Nico Fischer
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In February 2019, the tax authorities caused uncertainty with their view that a withholding tax of 15.825% should be retained by domestic clients of foreign providers on fees paid for online advertising (cf. Client Information of Feb 14 2019). This view has now been rejected by the tax authorities at federal and state level.

Key Facts

  • According to the initial tax authorities' view, foreign operators of web portals should have become subject to limited tax liability in Germany through the provision of online advertising services to domestic clients. Therefore, domestic advertisers would have to retain a 15.825% withholding tax on the remuneration and remit it to the Federal Central Tax Office.

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