Germany - Electronic reporting to replace physical tax vouchers submission for income paid as of 01/01/2025

Summary

Effective 1 January 2025, foreign investors in Germany will no longer need to provide physical vouchers. This follows the publication of the German Withholding Tax Relief Modernization Act (Abzugsteuerentlastungsmodernisierungsgesetz or “AbzStEntModG”) on 9 June 2021.

Concretely, as of 1 January 2025, the German Withholding Tax (WHT) agents, who are responsible for withholding tax on behalf of German Tax Authorities (GTA), will have to issue them with an electronic report. This will replace de facto the physical tax voucher for foreign investors. However, German investors will continue to receive physical tax vouchers.

Impact on investors

A new electronic report will be implemented whereby German WHT agents will share the income payments to the GTA. This new electronic report introduces the notion of Universally Unique Identifier (UUID) which will be assigned to each German income payment for a given beneficial owner.

Foreign investors willing to introduce a tax reclaim will therefore have to request the UUID from the German WHT agents and use the UUID while submitting the tax reclaim (either by their own or via a third-party provider).

The GTA will use the UUIDs to match the submitted tax reclaims with the reporting received from the German WHT agents.

The following income payments will be in scope of the electronic report submitted by the German WHT agents to the GTA:

• Dividends derived from German shares including German Real Estate Investment Trusts (REIT) shares
• Dividends derived from Depositary Receipts on German shares, including German REIT shares
• Income payments derived from equity-like and bond-like German profit participation certificates (also called jouissance rights)
• Interest payments derived from German Convertible Bonds
   

Action(s) Required

This new measure will impact the income paid as of 1 January 2025; for the withholding tax reclaim submitted on income paid prior to January 2025, the physical tax vouchers are still required by the GTA.

Further practical process explanation for the investors will follow as they occur.