Withholding tax

from Wikipedia, the free encyclopedia

Withholding tax is the name of a tax that is withheld directly at the "source" from which the income flows, e.g. B. at the employer or a bank. Taxpayer and taxpayer are not the same.

Withholding taxes serve to secure the tax revenue of the state, since a collection is already carried out with the (liquid) taxpayer, who is liable for the transfer to the tax office .

Germany

Withholding taxes are levied by way of tax deduction . For tax residents ( unlimited taxpayers ) , they are often treated like an income tax advance payment when assessing income . For tax non-residents ( limited taxpayers ) they usually have a final effect.

Examples of domestic withholding taxes

type of income Taxpayer (source) Tax debtor tax legal regulation
Wages employer Workers income tax Section 41a EStG
Supervisory board remuneration for persons with limited tax liability Payment debtor Payee Board tax Section 50a (1) No. 4 EStG
Investment income Credit institution Investor (bank customer) Capital gains tax Section 43 EStG
Consideration for commercial construction work to entrepreneurs (wages) Beneficiary Performing Construction withholding tax Section 48 of the Income Tax Act
Fees for artistic, sporting and a. Activities of limited taxpayers organizer Artists, athletes etc. a. Withholding tax Section 50a (1) No. 1 EStG

Foreign withholding taxes

In foreign tax law, withholding taxes are understood to mean all taxes that are levied by the source state on non-residents in the context of limited tax liability directly on income.

In Germany, a uniform flat tax of 25% has been levied on dividends and interest since 2009. The respective credit institution can in principle offset the foreign withholding tax on this tax.

If a tax resident earns income abroad that is subject to withholding tax there, the foreign tax will be offset against the German tax liability under certain conditions. If there is a double taxation agreement (DTA) between the foreign country (source country) and Germany , this regulates which of the two countries may tax the income and to what extent. The maximum amount of withholding tax is also specified here. If the foreign state levies no or a lower withholding tax than Germany, this fictitious withholding tax can also be offset according to some DTAs .

In order to ensure the effective taxation of interest income, the EU member states had applied the EU Savings Directive since 2003 , implemented in Germany with the Interest Information Ordinance of January 26, 2004 ( Section 45e EStG). According to this, banks are obliged to send the Federal Central Tax Office (BZSt) control notifications for interest income. The BZSt then exchanges this data with the other EU member states. Since the repeal of the EU Savings Directive on January 1, 2016, interest information has been exchanged internationally in accordance with the Common Reporting Standard (CRS).

Austria

Switzerland

In Switzerland, the earned income of certain foreign employees is subject to withholding tax.

People who

  • are domiciled in Switzerland for tax purposes but do not yet have the permanent residence permit (permit C) or
  • Do not have a tax residence in Switzerland for their income ( cross-border commuters , weekly resident , speakers, athletes, artists, etc.).

Only if the income exceeds a certain amount, a subsequent ordinary assessment of the entire income and assets will be carried out for foreign employees with tax residence in Switzerland. Otherwise the tax burden is definitive. This can lead to lower but also considerable additional burdens compared to the ordinary assessment. Only people with an income of more than 120,000 Swiss francs are entitled to the subsequent ordinary assessment . According to a federal court ruling, however, quasi-residents, i.e. H. People with residence abroad and at least 90 percent of their income from Switzerland (and less than 120,000 Swiss francs annual income, otherwise they would automatically be entitled to subsequent tax assessment) are entitled to the same taxation as those resident in Switzerland. How this should be done is not yet clear, on the one hand it can be done via the tariff correction (without adjusting the municipal tax rate), on the other hand via the subsequent ordinary assessment.

The withholding tax rates differ in the individual cantons .

The German-Swiss double taxation agreement differentiates between the various types of income with regard to the question of which state has the right to tax in cross-border matters.

Switzerland also regularly levies a withholding tax of 35% on cross-border interest payments on interest from German investors with tax residence in Germany. Instead of the automated exchange of information , Swiss banks do not provide the German tax authorities with any information about personal data and investment income, but instead retain 35% withholding tax anonymously and transfer it to the German tax authorities. Only if the taxpayer authorizes the Swiss bank to send the data on Swiss income to the German tax office will no withholding tax be withheld by the Swiss bank. The German investor then receives his income in full without deduction of the 35% withholding tax, but has to pay tax on it in Germany. German investors can also state the withholding tax paid abroad in their income tax return, which will then be offset against their domestic income tax.

For certain investment income, the Swiss bank withholds 35% of the so-called withholding tax instead of withholding tax . This remains with the Swiss tax authorities. It cannot be offset against the German income tax return, but can be reimbursed by Switzerland under certain conditions.

France

Since January 1, 2019, a new regulation has been in force in France , according to which - similar to what has been in Germany for a long time - wage tax must be paid by the employer.

Individual evidence

  1. ↑ What is a withholding tax? United Income Tax Aid , August 10, 2020.
  2. ^ Norbert Dautzenberg: withholding taxes Gabler Wirtschaftslexikon, accessed on August 20, 2020.
  3. ↑ Federal Central Tax Office : Foreign withholding tax as of 2020, accessed on August 19, 2020.
  4. ↑ BZSt: Crediting of withholding tax on dividends and interest from countries with which Germany has concluded a double taxation agreement. Explanations. PDF, as of January 1, 2020.
  5. ↑ Dirk Wendl: Reimbursement of foreign withholding tax - important information for investors. June 9, 2020.
  6. ↑ EU Savings Directive - General Information BZSt, accessed on August 20, 2020.
  7. ↑ cf. Council Directive (EU) 2015/2060 of November 10, 2015 repealing Directive 2003/48 / EC in the field of taxation of savings income , ABl. L 301/1 of November 18, 2015
  8. ↑ Christian Rödl: The automatic exchange of information replaces the EU Savings Directive. July 26, 2017.
  9. ^ Withholding tax Swiss Confederation, accessed on August 21, 2020.
  10. ↑ Judgment 2C_319 / 2009 of January 26, 2010  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Toter Link / jumpcgi.bger.ch  
  11. ↑ Agreement between the Swiss Confederation and the Federal Republic of Germany to avoid double taxation in the area of ​​taxes on income and assets as of December 28, 2016, accessed on August 21, 2020.
  12. ↑ The German-Swiss double taxation agreement network of information and advice centers for cross-border issues on the Upper Rhine, accessed on August 21, 2020.
  13. ^ Uli Reitz: Interest from Switzerland September 8, 2014.
  14. ↑ https://eurodroit.com/personalverwaltung/gzw-einfuehrung-der-quellesteuer-in-frankreich