The Federal Central Tax Office (BZSt) is responsible for collecting income or corporate income tax on income subject to limited taxation from service providers (person or company) resident in a non-cooperative territory.

Limited taxable income of service providers resident in a non-cooperative territory are:

• Financing relationships (especially interest on loans),
• Insurance or reinsurance services,
• services and
• Trade in goods or services.

Income or corporate income tax arises when the remuneration accrues to the provider of the service. When the remuneration is paid, the recipient of the service must withhold, declare and pay the tax deduction. The tax is withheld for the account of the service provider.

The amount of tax withheld is 15 percent of the income, plus solidarity surcharge of 5.5 percent of the tax withheld.

You must declare the income or corporation tax via the BZSt online portal.

A tax jurisdiction is considered non-cooperative within the meaning of the law if it is listed on the so-called EU blacklist as well as in the national tax haven defense ordinance (StAbwV).

In this case, you also have increased obligations to cooperate.