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Tax Exemptions

Germany has signed agreements with 90 countries to avoid double taxation and reduce German income tax.

Foreign tax payers who earn royalties in Germany can apply to avoid or reduce German income tax.

But: They need to apply for tax exemption with the German Central Administration for Taxes by filling in the application form for each debtor and enter proof or regular taxation in their country of residence. The German tax authorities will then consider the application.

This process takes up to twelve months (Dec 2023). The German publisher keeps the author's royalties during that time and will not pay interest.

Once granted, the tax exemption is valid for three years. If an author receives royalty payments from more than one publisher, the will need to apply separately.

Authors who prefer to waive their exemption and pay German income tax (15%) will receive their royalties immediately. They can apply to claim the German tax back later, or they may be able to file the German income as a credit against their local tax under the Double Taxation Treaty.