Debt securities - rates, eligibility, availability of relief etc. - Germany
Withholding tax
| Standard rate of withholding tax: | 0% / 26.375% | Trading restriction: | Yes |
Interest on most debt securities held in LuxCSD is not subject to German withholding tax and is systematically paid gross with no action required of the customer or beneficial owner to obtain exemption.
There is an effective withholding tax (Kapitalertragsteuer; KESt) rate of 26.375% on interest from the following corporate debt securities, depending on their character in each case:
- Convertible bonds (Wandelschuldverschreibungen);
- Jouissance shares: Profit participating rights that do not entitle the owner to liquidation proceeds (Genußscheine ohne Anteil an Liquidationserlös);
- Bonds conveying an interest in profits of the issuer (Gewinnobligationen).
This effective rate comprises a standard rate of 25% plus a solidarity surcharge (Solidaritätszuschlag; SolZ) of 5.5% of the standard rate.
Availability of relief
Click on the image to view the diagram showing the availability of relief at source and/or reclaim of withholding tax on income from German debt securities.
| Eligible beneficial owners | Relief at Source | Quick Refund | Standard Refund |
Residents of Double Taxation Treaty countries | No | No | Yes |
Residents of Germany | No | No | No |
| Income payments subject to KESt paid to a foreign investment fund pursuant to § 1 InvStG a | Yesb | No | No |
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a. According to the German Investment Tax Act, if a foreign investment fund obtains and provides a Fund Status Certificate for classification of the fund pursuant to § 1 InvStG, the German KESt is reduced to 15% at source irrespective of the location of the fund. Customers must in this case provide a break down to disclose the fund company (identified by the Ordnungsnummer) and the relevant holdings of the fund company per single income payment to get taxation at a reduced rate of 15% (withholding tax standard rate including solidary surcharge). This per payment information must be provided to LuxCSD 30 calendar days after the record date of the taxable income event latest, using the existing Upload Beneficial Owner List functionality.
b. Relief at source is possible (BD process within 30 days after Payment) but no standing instruction. Please refer to Announcement C21032
If the Fund Status Certificate of a foreign investment fund is submitted after the payment date of the event, the overpaid KESt amount (11.375%) can be reclaimed by applying the standard tax refund procedure and presenting the relevant documents to the Federal Central Tax Office within the statutory deadline.
Relief at source and quick refund
Relief at source and quick refund are not available through LuxCSD.
Standard refund
A standard refund is available if the beneficial owner qualifies for the benefit of a reduced rate of withholding tax in accordance with a Double Taxation Treaty (DTT) between its country of residence and Germany.
Customers can reclaim withholding tax on behalf of beneficial owners through LuxCSD by submitting the appropriate required documentation.
Residents of Germany cannot reclaim withholding tax through LuxCSD.