Germany Federal Fiscal Court Posts Decision Clarifying Withholding Rate for Individual’s Interest Income

The German Federal Fiscal Court Aug. 17 posted online Decision No. VIII R 15/21, clarifying an individual’s withholding rate on loan interest. The taxpayer made loans to a Dutch company in which he held shares through another Dutch company as sole shareholder. He declared the interest as capital gains subject to the special 25 percent tax rate. The Federal Tax Office found instead that the standard rate applied. The lower tax court ruled against the taxpayer. On appeal, the Federal Finance Court affirmed, holding that: 1) the 25 percent capital gains rate under Sec. 32d(1) of the Income Tax Act, ...