With the additional taxation according to §§ 7 to 14 of the Foreign Tax Act (AStG), the legislature wants to counteract arrangements in which a German taxpayer “smuggles” profits via foreign intermediaries in order to reduce the total tax burden. The so-called additional amount, which belongs to the capital income according to § 20 EStG, is to be used. We take a closer look at the concrete calculation of the additional amount according to § 10 AStG!
First principle: What is behind the additional taxation?
The additional taxation regulated in §§ 7 to 14 AStG is one of the domestic norms of international tax law, so it is not based on agreements and agreements with other states, such as a double taxation agreement (DTA). Like the other rules of external tax law, their effect therefore extends in principle only to domestic taxpayers.
Prerequisite for the application of the additional taxation is that a domestic unlimited taxpayer (natural or legal person) controls a foreign corporation (§ 7 (1) sentence 1 AStG). ‘control’ is always present when the person concerned is directly or indirectly attributable to more than half of the voting rights or more than half of the shares in the nominal capital (paragraph 2). If this is the case, the foreign company is also considered a related party.
However, the determination of an additional amount according to § 10 AStG becomes necessary only if the foreign company is an intermediary company within the meaning of § 8 AStG. This condition is deemed to be met in the following cases:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.