Geoblocking, Geoblocking-Verordnung

Online Advertising Fees not subject to German Withholding Tax

German tax authorities officially reject recent tax audit trend. Significant impact on the tax position of nonresident companies offering online advertising services in Germany could be avoided.

Online advertising is booming thanks to global digitization. In a number of recent German tax audits, tax inspectors have treated payments as withholding tax-inducing royalties if made by German companies to nonresidents offering online advertising services. According to these auditors, cross-border payments are made for the use of undisclosed know-how. Consequently, the auditors applied the withholding […]
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Geoblocking, Geoblocking-Verordnung

Follow up: Tax Authorities’ About-turn: No Withholding Tax Obligation on Fees for Online Advertising

No additional tax burdens for domestic advertisers

The Bavarian finance minister, Albert Füracker, from the state’s Ministry of Finance and Home Affairs stated: „At Bavaria’s instigation, it has been possible to reach clarification on a national federal level. It is now finally clear that domestic companies do not have to withhold tax on online advertising.“ One of the justifications for this is […]
Geoblocking, Geoblocking-Verordnung

Some German Tax Auditors Apply Withholding Tax on Fees for Online Advertising

A recent tax audit trend in Germany has the potential to significantly impact the tax position of both German companies which use online advertising and nonresident companies offering online advertising services in Germany.

Alarming audit trend in Germany German tax auditors have recently started to treat payments made by German companies to nonresidents offering online advertising services as royalties. In the auditors’ view, cross-border payments are made for the use of undisclosed know-how in the form of advertising algorithms. Although the auditors justify this practice by the application […]
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