In an unexpected development the German Ministry of Finance has released a draft bill on 20 November 2020 to amend the German WHT rules in a way that the mere registration of IP in Germany would no longer make it subject to German WHT or capital gains taxation. The proposed rules shall be effective for all open assessments so that the change would effectively also apply for past transactions. In the explanatory notes to the draft law it is stated that the change is made to avoid unnecessary administrative burden in cases where there is treaty protection. However, the language of the law does not limit the change to treaty situations. It remains to be seen whether this is by intent or a mistake.
It has to be noted that this is just a draft of the Ministry of Finance, it would first need to be approved by the government and then go through the legislative process. As this came as a surprise we currently do not have any insight in how likely and in what timeframe this could become law. Nevertheless the review and filing of cases with the German tax administration should stay on-hold since we expect clearance soon. We will keep you updated as soon as more information becomes available.