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In this newsletter, we introduce the latest developments and a simplification rule with regard to the limited tax liability in Germany arising when Intellectual Property (“IP”) is registered in Germany (so-called “Register-Cases”). Generally, non-resident companies are limited tax liable in Germany if the income source relates to Germany. This means, income derived from e.g. renting German real estate, from the activities performed by a German permanent establishment but also derived from exploiting Intellectual Property (“IP”) in Germany are subject to limited tax liability in Germany due to the domestic nexus to Germany. However, the German Federal Ministry of Finance confirmed in 2020 that apart from establishing a domestic nexus through exploitation IP in Germany, for example by using them in a German permanent establishment, the German nexus should be fulfilled already to rights that are listed in a German public register; this may even include the European patent office located in Munich.
KPMG in Germany - Global Korean Practice Update - January 2023 - Preview
Current topics of the issue:
- Update of the simplification rule with regard to the Limited tax liability in Germany if IP is listed in German registers
- Real Property tax reform: lots of data, little time
- Paperless Office & Digital Tax Compliance, from status quo to a sustainable digital future