License barrier
In German tax law , the license barrier is an element of corporate taxation that is intended to avoid cross-border tax arrangements between companies in the case of expenses for the transfer of rights. It is regulated in § 4j EStG.
General
The license limit was introduced with the law against harmful tax practices in connection with the transfer of rights on June 27, 2017 and applies for the first time for tax periods after December 31, 2017. The reason for the existence of this legal norm is the limitation of the deductibility of expenses for the transfer of rights.
Background, meaning and purpose
In the past, many companies, especially large international corporations, sold their license and trademark rights to subsidiaries in tax-favorable foreign countries and at the same time rented these rights for overpriced leasing fees in order to drastically reduce their domestic tax burden. Against this background, the legislature was forced to limit these expenses in the future. The practice of this tax avoidance is best known under the name Dutch Sandwich. In the draft law, the federal government assumes an annual tax revenue of 30 million euros.
functionality
The legal norm basically stipulates that such expenses are only deductible in full if the debtor can prove that the obligee has to pay a tax rate of at least 25% on the income from this transfer of rights. In the event that the tax rate is lower, these expenses are only partially deductible. The non-removable part is determined as follows:
Individual evidence
- ↑ buzer.de: Article 1 RÜbStG amendment of the income tax law law against harmful tax practices in. Retrieved May 8, 2020 .
- ↑ The trick Google uses to smuggle 20 billion euros past Europe's tax offices every year. In: Focus Online. Retrieved May 8, 2020 .
- ↑ Index of / ReWirPDF. Retrieved June 4, 2020 .
- ↑ § 4j EStG - single standard. Retrieved May 8, 2020 .