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Withholding Tax in Germany

Net deals

Outside of the professional touring industry, so-called “net deals” are just as commonly arranged as before. In these arrangements, only the net honorarium is mentioned in the contract. Furthermore, the German contracting party is obligated to assume [responsibility for] paying taxes. In this case the gross honorarium – that is, the actual earnings of the artist or production company also – is determined through retrograde calculation.

At an applicable tax rate of 15% plus 5.5% solidarity tax contribution (gross lump sum taxation), the net amount is to be increased to 18.80%. In a net deal on 10,000 Euros, the earnings therefore come to €11,880.00. The amount of tax at this rate therefore comes to €1,880.--.
 

 

 

At an applicable tax rate of 30% plus 5.5% solidarity tax contribution (net lump sum taxation), the net amount is to be increased to 46.40 %. In a net deal on 10,000 Euros, the income subject to tax therefore comes to € 14,640.00. The amount of tax at this rate therefore comes to € 4,640.--.
   
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