Double Taxation: Germany and the United States Sign New Convention
Preexisting German Tax Laws Superseded
Taxation Rights and Revenue Generation
On a recent date, the Federal Republic of Germany and the United States of America signed a new Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital.
The new Convention modifies and supersedes the previous tax treaty between the two countries, which was signed in 1989. The new Convention includes a number of significant changes, including:
- An expansion of the scope of the Convention to include new types of income, such as business profits and capital gains.
- A reduction in the withholding tax rate on dividends, interest, and royalties.
- A new provision that allows for the exchange of information between the two countries' tax authorities.
The new Convention is expected to enter into force in 2023. Once in force, it will help to reduce the tax burden on businesses and individuals in both countries and will make it easier for them to do business across borders.
Conclusion
The new Convention is a significant development in the tax relationship between Germany and the United States. It will help to reduce the tax burden on businesses and individuals in both countries and will make it easier for them to do business across borders. The Convention is a testament to the strong economic and political ties between the two countries.
Comments