Ministry of Finance publishes guidance on application of subject-to-tax, remittance basis and switch-over clauses under tax treaties in respect of a decision of the Federal Financial Court

On 27 August 2013, the Ministry of Finance published guidance in form of an official letter dated 20 July 2013, regarding the application of subject-to-tax, remittance basis and switch-over clauses under tax treaties, taking into account a decision of the Federal Financial Court of 17 October 2007 (I R 96/06).

Subject-to-tax clauses

The guidance differentiates between three types of subject-to-tax clauses in tax treaties concluded by Germany:

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