The refund procedure under section 50c (3) of the Income Tax Act applies to German income from capital as described in section 49 (1) no 5 of the Income Tax Act that is subject to withholding pursuant to section 43 of the Income Tax Act.

The Federal Central Tax Office refunds withheld and remitted capital income tax insofar as such tax exceeds the relevant withholding tax rate under the applicable double taxation agreement or under sections 43b or 44a (9) of the Income Tax Act. Refunds are also provided on the basis of section 11 of the Investment Tax Act.

Refunds of capital income tax that is withheld without a legal basis are made (in accordance with section 37 (2) of the Fiscal Code) by the tax office that received the payment and that has jurisdiction for the party that withheld the tax. These are cases where tax was withheld although the relevant income from capital was not subject to non-resident taxation under section 49 of the Income Tax Act at the time the income was accrued.

Refunds in accordance with section 37 (2) of the Fiscal Code by the tax office with jurisdiction for the party that withheld the tax are not granted for capital income that accrued during the calendar year when the taxpayer’s status switched from resident to non-resident (i.e. when the taxpayer moved abroad from Germany). In such cases, the capital income tax withheld without a legal basis is offset against the income recipient’s income tax (section 36 (2) no 2 sentence 5 of the Income Tax Act); this is done by the local tax office with jurisdiction for the income recipient as part of a tax assessment (section 2 (7) of the Income Tax Act).

Refund applications may be filed by non-resident taxpayers who are the beneficiaries of income from capital at the time when the income is accrued.

Applications filed without forms have no legal effect for refunds under section 50c (3) of the Income Tax Act. Please use the forms provided under the link “Refund forms/instructions for filling out forms/useful information”.

When you file a refund application, you must also upload a certificate of residence and the relevant tax certificate(s). It is not necessary to submit the original certificates by post.

Applicants must prove their residence status with a verification from the tax authorities that have jurisdiction for them at the time when the income from capital accrues.

On the certificate of residence, the tax authority must confirm that (a) the applicant’s place of residence, habitual abode or management at the time when the capital income was accrued matches the information provided by the applicant in the refund application and (b) the applicant is therefore covered by the relevant agreement / had their registered office there / is an eligible applicant under section 43b of the Income Tax Act.

Please upload the residence certificate to the online portal when you file your refund application.

In certain cases, the German tax authorities may request submission of the original certificate of residence.

A tax certificate serves as proof of:

• the type of income from capital
• the amount of income from capital
• the amount of capital income tax withheld
  and
• the amount of solidarity surcharge withheld

Tax certificates are issued by domestic (i.e. German) paying agents. Under section 44 (1) sentence 4 no 3a of the Income Tax Act, paying agents are

1. German banks and financial services institutions and
2. German securities firms

that manage shares or hold them in safe custody and that disburse/credit the income from capital or disburse the income from capital to a foreign entity.

A credit advice (such as a dividend statement) from a (foreign) custodian bank does not qualify as a tax certificate.

Refund applications must be submitted within a period of four years after the end of the calendar year in which the capital income or remuneration was accrued (section 50c (3) sentence 2, first half-sentence of the Income Tax Act).

Exceptions:

1. For income accrued up to and including 8 June 2021:
   
   The period for submitting applications ends no earlier than six months after the date when the tax was paid (section 50d (1) sentence 10 of the Income Tax Act, old version).
   
   For income accrued on or after 9 June 2021:
   
   The period for submitting applications ends no earlier than one year after the date when the tax was paid (section 50c (3) sentence 2, second half-sentence of the Income Tax Act).
   
   This rule applies, for example, in cases where a constructive dividend is found during the course of an audit and the tax amount increases as a result (section 50c (3) sentence 2, second half-sentence of the
   Income Tax Act).
   
2. If a double taxation agreement provides for a later deadline, the submission period does not end before that later deadline.

If an exemption certificate has been issued, the party paying the income from capital can, from the outset, refrain from withholding tax or withhold tax at a reduced rate. If capital income tax has already been withheld and remitted because the exemption certificate had not yet been issued by the time the tax was declared, the party paying the income from capital can file an amended capital income tax return to the appropriate tax office and receive a refund in accordance with section 44b (5) of the Income Tax Act.

“Residual tax” is the tax amount that the state in which the capital income originates (i.e. the source state) does not have to reimburse under the applicable tax relief rules (e.g. a double taxation agreement, section 44a (9) of the Income Tax Act, etc.). The main factors that determine the residual tax rate are the type of income from capital (interest, dividends, etc.); the number of shares; and the legal form of the person/entity receiving the income from capital.

Section 44a (9) of the Income Tax Act provides for a refund of two fifths of the withheld and remitted capital income tax and solidarity surcharge in the case of income from capital that accrues to a corporation, association or pool of assets that has its registered office and place of management outside Germany and that is subject to non-resident taxation rules.

Refunds to foreign investment funds pursuant to section 44a (9) of the Income Tax Act are not permitted (see also section 7 (1) sentence 2 of the Investment Tax Act)..

Please use the payment date specified in the individual tax certificate as the “date of accrual” in the refund application.

Recipients of capital income from free-float shares must comply with the special rules in section 50j of the Income Tax Act if they have received capital income since 1 January 2017 that is subject to a tax rate of less than 15% under a double taxation agreement or other bilateral agreement.

Applicants in such cases must use Form 010004 (“Refund application in cases where the withholding tax rate is less than 15%”) and confirm that they meet the conditions specified in section 50j (1) nos 1-3 of the Income Tax Act. The Federal Central Tax Office reserves the right to review this information and to request corresponding proof. Please note the obligation of applicants and participants to cooperate (section 90 in conjunction with section 78 of the Fiscal Code).

In general, applications are processed in the order received.

An application cannot be processed until all documentation has been submitted in full. The required documentation is specified in the relevant application form and the related instructions for filling out the form.

In the course of processing an application, the Federal Central Tax Office may request further documentation or information on a case-by-case basis.

The high volume of applications received may lead to longer processing times. To avoid further delays, the Federal Central Tax Office does not respond to status queries.

Applications for capital income tax relief may be filed by non-resident recipients of capital income themselves or by an authorised representative (see section 80 of the Fiscal Code). Authorised representatives must provide proof of their legal authority to act on behalf of non-resident capital income recipients in tax-related administrative proceedings.

As a prerequisite, authorised representatives must at least have the power to provide assistance in tax matters on a commercial basis, as set out in the Tax Consultancy Act.

Applications filed without using an official form have no legal effect for refunds under section 50c (3) of the Income Tax Act. Please use the Federal Central Tax Office’s online portal (BOP) to file your application.

Spouses cannot submit a joint application in the electronic application procedure. Each spouse must submit a separate application for reimbursement.

First option:

Each of the two spouses applies for access to the BZSt online portal (registration process) and submits a separate application.

Second option:

One spouse applies for access to the BZSt online portal, submits his or her own application and additionally the application of the spouse as an authorized person. A corresponding power of attorney must be uploaded when the application is submitted.

Please note the following when completing the application form. The following notes must be included in the free text field "Notes on the application":

• "This is a joint custody account in which both spouses each hold a 50% interest."
• Name of the spouse

Communities of heirs cannot submit a joint application in the electronic application procedure. Each of the heirs must submit an individual application for reimbursement.

First option:

Each heir applies for access to the BZSt online portal (registration process) and submits a separate application.

Second option:

One of the heirs applies for access to the BZSt online portal, submits their own application and additionally the applications of the other heirs as an authorized person. A corresponding power of attorney must be uploaded when the application is submitted.

Please note the following when completing the application form. The following notes must be included in the free text field "Notes on the application":

• This is a joint custody account in which I hold an interest of xy % as an heir."
• Names of the other heirs