In addition to double taxation agreements on income and capital taxes, there are also special double taxation agreements for inheritance and gift taxes as well as vehicle tax. There are also agreements for legal assistance, administrative assistance and information exchange. The exchange of information between tax authorities is particularly important for the detection and fight against tax evasion and evasion and to ensure good taxation. Through its tax law, Germany intends to avoid both double taxation and double non-taxation of individuals and businesses. Everyone must pay their fair share of the tax in their place of residence or in the place where they operate. One of the most important changes to the double taxation convention between Germany and China concerns stable establishments. If, under the old contract, a construction site, management site or other meetings in Germany or China have been considered stable establishments when operating in either country for at least six months, the current agreement provides that these facilities are considered stable after being operational for at least twelve months. The new double taxation agreement between Germany and China also provides that services activities of more than 183 days may also be constituted in stable units in a calendar year. The agreement also applies to other similar taxes collected in both countries.
In addition, the German and Chinese tax authorities will inform each other of changes to their tax regimes that could affect the agreement. This page provides information on German double taxation conventions and other country-specific publications on double taxation conventions. You can view the original texts via our German website. Our German lawyers can provide you with more information about stable settlement under the new double taxation agreement with China. In addition, compared to other TDTs signed with other countries, the new DTT deliberately adds a paragraph: «15% of the gross amount of dividends if these dividends are paid directly or indirectly on real estate within the meaning of Article 6 of an investment vehicle that distributes the majority of this income or profits each year and whose income or profits from these real estate properties are exempt from tax.» It mainly takes into account dividends through integrated investment instruments oriented towards real estate, it is obviously more closed to the real estate result. Under the principle of Article 6, the State of origin should have unlimited taxation power. Although the new gross amount of dividends is 15%, but under the agreement and national legislation that highlights the principle of the subject, the effective tax rate in non-resident businesses is 10%, as provided for by the Enterprise Income Tax Implementation Regulations as in the case of individual non-resident income, and is collected to the tune of 15%. International tax law includes all legal provisions that include foreign-related tax matters. These include internal tax laws in Germany, such as the Income Tax Act and the Tax Law, as well as double taxation agreements that Germany has entered into with other countries. In addition, the former DTT regulates matters: with regard to the tax paid by residents of the Federal Republic of Germany on the dividends, interest and royalties they have collected in China, regardless of the amount, it is permissible to obtain tax credits after 10% of the total dividend and 15% of the total amount of interest and royalties.