Germany: Status of income tax treaties

Information on the current status of Germany’s network of income tax treaties and treaty negotiations

Current status of Germany’s network of income tax treaties and treaty negotiations

The German Federal Ministry of Finance (BMF) in January 2022 provided information on the current status of Germany’s network of income tax treaties and treaty negotiations in annual guidance. 

  • Germany currently has income tax treaties with 96 countries.
  • The income tax treaty (dated 1 July 2010) with the United Arab Emirates (UAE) ceased to apply 31 December 2021, and it was not renewed.
  • The following income tax treaties and Protocols are effective for the first time from 1 January 2022:
    • Denmark
    • Estonia
    • Finland
    • Ireland
    • Liechtenstein
    • Singapore
    • United Kingdom
    • Cyprus
  • Protocols to income tax treaties were newly signed in 2021 with:
    • Mauritius
    • Mexico
    • The Netherlands
  • The agreements still need to be transposed into national law.
  • No new treaty text was added to the (amended) treaties or Protocols of amendments in 2021.
  • Negotiations for (amended) treaties or Protocols of amendment were initiated with the following countries:
    • Sri Lanka
    • Tunisia
    • Vietnam

KPMG observation

It cannot be predicted how long each set of negotiations will last. Negotiations can span several years.

Pursuant to the BMF guidance, several of the treaties will become applicable retroactively after they have taken effect. In certain instances, tax assessments must be made provisionally if it is uncertain when the signed treaty will come into force, which will be to the benefit of the taxable entity.

Read a March 2022 report [PDF 344 KB] prepared by the KPMG member firm in Germany

 

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