Germany: Electronic transfer of refund applications for taxpayers with restricted tax liability
In 2021, the German parliament approved the Withholding Tax Relief Modernisation Act (AbzStEntModG), a bill proposed by the Federal Ministry of Finance (BMF) aiming at the modernisation and improvement of withholding tax relief procedures to combat tax abuse and evasion.
This bill includes the obligation (in section 50c paragraph 5 of the German Income Tax Act, EStG), as from 1 January 2023, for taxpayers with restricted tax liability in Germany (that is, German non-resident taxpayers), to transmit their standard refund application forms to the Federal Central Tax Office (BZSt) electronically.
At the intervention of the German banking industry (DK), the BMF, in consultation with the BZSt, granted a transitional period of six months until 30 June 2023, during which refund claims can still be submitted on paper.
There is currently no guideline or procedure announced by the BZSt describing how to submit tax refund application forms electronically after that date and how in practice banks, in their capacity as service providers, will be able to assist customers going forward.
Impact on customers
Clearstream Banking1 is closely monitoring the situation and will notify customers as soon as further information becomes available.
Clearstream Banking recommends filing pending tax refund claims with the BZSt as quickly as possible, and in line with the above information, it will accept customers’ paper-based tax refund requests until 31 March 2023.
Provided that the required tax reclaim certification is complete and valid, all standard refund applications received after the Clearstream Banking deadline will be processed on a "best efforts" basis. However, in such cases, Clearstream Banking can accept no responsibility for documentation that has not reached the local tax authorities before the market deadline.
Note: Customers are reminded that Clearstream Banking accepts no responsibility for the acceptance or non-acceptance of refund applications by the BZSt. It is the customer’s responsibility to determine any entitlement to a refund of tax withheld, to complete the required forms correctly and to calculate the amount due.
Where to send the tax reclaims
Customers are kindly requested to send all tax reclaim requests for the above markets to the address as indicated in the Clearstream Banking Creation Quick Tax Reference Matrix.
For further information, customers may contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or their Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.