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Exemption from and refund of German withholding tax under § 50c EStG

Even where a double taxation agreement (DBA) prevents Germany from taxing your royalties or performance fees, the German payer must STILL withhold the § 50a EStG tax (§ 50c(1) EStG) — unless you, as the foreign creditor (Vergütungsgläubiger), hand them an exemption certificate (Freistellungsbescheinigung) from the Federal Central Tax Office (BZSt) BEFORE payment (§ 50c(2) sentence 1 no. 1 EStG). Once tax has been withheld, the only route is a refund (Erstattung) from the BZSt (§ 50c(3) EStG), within four years of the end of the year of payment. Only the creditor can file either application, electronically through the BZSt online portal (§ 50c(5) sentence 1 EStG).

Up to date for 2026 — verified on September 23, 2026Official procedure, no printed formGuide: about 40 min

Deadlines

Exemption: apply BEFORE payment
The certificate takes effect at the earliest from the day the application reaches the BZSt, for no more than five years (§ 50c(2) sentence 4 EStG)
Decision on the exemption application
Within three months of ALL required evidence being provided (§ 50c(2) sentence 6 EStG); the BZSt warns that processing currently takes about 6 months
Refund: four years from the end of the year of payment
The period starts at the end of the calendar year in which the payment was received; it does not end before one year after the tax was paid, nor before any longer treaty period (§ 50c(3) sentence 2 EStG)
The payer still files a return
Even under an exemption the payer must file the withholding tax return (§ 50c(2) sentence 2 EStG; § 50a(5) sentence 4 EStG)

Documents to prepare

  • The contract with the German payer and the type of payment (performance, licence, supervisory board fee)
  • A certificate of residence from your home tax authority
  • Access to the BZSt online portal, or a power of attorney for a representative
  • Where tax has already been withheld: the payer's withholding certificate
  • Payment dates and amounts per calendar year
  • For corporations: information on shareholders and on your own economic activity (§ 50d(3) EStG)
See the procedure on the official site

No form is attached to this procedure: the link leads to the official page that describes it.

What this page gives you

The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.

Who this applies to

  • Artists, athletes, licensors and supervisory board members resident abroad whose German income is subject to withholding under § 50a EStG, where the relevant treaty provides for full or partial relief (BZSt, relief procedure under § 50c EStG)
  • For instance an illustrator resident in France granting usage rights to a German publisher (§ 50a(1) no. 3 EStG), or a musician performing in Germany (§ 50a(1) no. 1 EStG)
  • Foreign corporations, with the further restriction of § 50d(3) EStG: no relief to the extent they are owned by persons who would not be entitled had they earned the income directly, and the income has no substantial connection with an economic activity of their own
  • NOT entitled to apply: the German payer (Vergütungsschuldner), who can act only as the creditor's authorised representative (BZSt, relief procedure)
  • NOT concerned: anyone with no entitlement to relief under a treaty, § 43b or § 50g EStG — withholding then simply stands
  • The PAYER's duties (withholding, filing, liability) are covered by the guide to § 50a withholding from the payer's side — this guide is the creditor's side

Worked example

Camille Durand, an illustrator in Lyon, licenses drawings to a Hamburg publisher

Her contract with the fictitious Nordlicht Verlag GmbH provides for three payments of 6,000 euros each in 2026, as consideration for the use of copyrights (§ 50a(1) no. 3 EStG). First payment in February: the publisher checks the treaty to see whether it precludes German taxation and, if so, uses the exemption option — 6,000 euros does not exceed 10,000 euros, so nothing is withheld, but a return is filed (§ 50c(2) sentence 1 no. 2 and sentence 2 EStG). Second payment in May: it takes the total to 12,000 euros, the option no longer applies, and the publisher withholds the tax (the amount comes from the calculator for withholding on non-residents). According to the BZSt page on the exemption option, the first payment is NOT taxed retroactively. Camille now files an exemption application through the BZSt online portal, with a certificate of residence from the French tax authority (§ 50c(5) sentence 2 EStG). If the certificate is issued before the third payment, the publisher pays with no (or reduced) withholding. For the amount withheld in May she files a refund application, attaching the publisher's withholding certificate (§ 50c(3) sentence 3 EStG); deadline: four years from the end of 2026, i.e. the end of 2030 (§ 50c(3) sentence 2 EStG).

How to fill it in, step by step

  1. Work out which number of § 50a(1) EStG your payment falls under: performance (no. 1), exploitation of a performance (no. 2), licensing of rights (no. 3) or supervisory board fees (no. 4).
  2. Check whether the relevant treaty removes Germany's taxing right in whole or in part — without that basis there is no relief under § 50c EStG.
  3. For licensing: ask the payer whether they apply the exemption option up to 10,000 euros per calendar year (§ 50c(2) sentence 1 no. 2 EStG) — no application is needed for it.
  4. Obtain confirmation from your home tax authority that you are resident there (§ 50c(5) sentence 2 EStG).
  5. Register on the BZSt online portal (BOP) or authorise a representative — possibly the payer — using the BZSt's bilingual power of attorney.
  6. File the exemption application BEFORE payment (§ 50c(2) sentence 1 no. 1 EStG); corporations add the information on § 50d(3) EStG.
  7. Give the payer the certificate once issued, and watch its time limit and conditions (§ 50c(2) sentence 4 EStG).
  8. If tax has already been withheld: ask the payer for the withholding certificate (§ 50a(5) sentence 7 EStG) and file the refund application (§ 50c(3) EStG) in time.

Good to know

  • The treaty alone does not release the payer: they must apply the withholding, payment and filing rules regardless, and cannot rely on your treaty rights (§ 50c(1) EStG).
  • The exemption option covers only licensing under § 50a(1) no. 3 EStG, not performances (§ 50c(2) sentence 1 no. 2 EStG). Until 31 December 2023 the limit was 5,000 euros and exceeding it cancelled the option retroactively; since 2024 earlier payments stay free of withholding (BZSt, exemption option).
  • A withholding tax return already filed cannot be amended on the strength of an exemption, unless the certificate had not yet been issued when the return was filed (§ 50c(2) sentence 3 EStG).
  • A refund requires that the tax cannot be credited against your German income or corporation tax under § 36(2) no. 2 EStG (§ 50c(3) sentence 1 EStG).
  • § 50c(4) EStG provides for interest only on refunds made in conjunction with § 50g EStG (royalties between associated EU companies).
  • The payer is liable for withholding and paying over the tax (§ 50a(5) sentence 5 EStG); if they did not withhold correctly, the creditor can also be pursued (sentence 6). The certificate protects both sides.
  • Without a power of attorney the payer receives neither decisions nor information on your case, because of tax secrecy (§ 30 AO) (BZSt, relief procedure).
  • Paper applications only in hardship cases: where electronic filing is economically or personally unreasonable, on the official form (§ 50c(5) sentence 3 EStG; § 150(8) AO).

Common mistakes

  • Showing the payer only the treaty. Without an exemption certificate (or the no. 2 option) they must withhold (§ 50c(1) EStG).
  • Applying for the exemption after payment. The certificate takes effect at the earliest when the application is received (§ 50c(2) sentence 4 EStG); for past payments only a refund remains.
  • Letting the payer apply in their own name. Only the creditor is entitled; the payer can act only as representative.
  • Applying the exemption option to performance fees. It covers only § 50a(1) no. 3 EStG.
  • Applying for a refund without the withholding certificate. It must be attached (§ 50c(3) sentence 3 EStG).
  • Forgetting the foreign tax authority's certificate of residence (§ 50c(5) sentence 2 EStG).
  • Counting the deadline from the payment date. It starts at the end of the calendar year of payment (§ 50c(3) sentence 2 EStG).

Frequently asked questions

What is the difference between exemption and refund?

Exemption works BEFORE payment: with the BZSt certificate the payer withholds nothing or a reduced amount (§ 50c(2) sentence 1 no. 1 EStG). Refund works AFTERWARDS: the BZSt repays tax already withheld and paid over (§ 50c(3) EStG).

How long is an exemption certificate valid?

At most five years, starting no earlier than the day the application reaches the BZSt, and subject to the conditions continuing to be met throughout (§ 50c(2) sentence 4 EStG).

Do I need to apply at all for licence fees under 10,000 euros?

Not if the payer uses the exemption option: for licensing where a treaty precludes German taxation, they may refrain from withholding as long as payments to you in the calendar year do not exceed 10,000 euros (§ 50c(2) sentence 1 no. 2 EStG). Checking the treaty is their responsibility.

How do I file?

Using the official data record through the BZSt online portal (§ 50c(5) sentence 1 EStG), with a certificate of residence from your tax authority (sentence 2). Paper only in an accepted hardship case (sentence 3).

Is interest paid on the refund?

§ 50c(4) EStG provides for interest only on amounts refunded under subsection 3 in conjunction with § 50g EStG — not on every treaty refund.

Go further

Compute the related amounts

Related forms

Official sources

Read in German

Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.