Navigating the Once-Obscure German Nonresident Withholding Tax

Skadden Podcast / GILTI Conscience: Casual Discussions on Transfer Pricing, Tax Treaties and Related Topics

Nathaniel Carden David Farhat Johannes Frey Eman Cuyler Stefane Victor Ryan Lange, Kerim Keser

In this episode of Skadden’s “GILTI Conscience” podcast, partners Nate Carden and David Farhat discuss the German nonresident withholding tax with partner Johannes Frey, in the Frankfurt office, and Ryan Lange and Kerim Keser of the consulting firm Kroll. This once-obscure tax rule, which applies to intellectual property licenses registered in Germany, has been confounding multinational companies since the tax authorities began applying the rule in recent years. As Nate explained by way of an example, “If you have a U.S. multinational company that licenses its IP to its operating headquarters in some other country, not Germany ... the idea is that to the extent that the royalties relate to German-registered rights, Germany would assert the ability to withhold even though they’re not on either side of the transaction.”

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