Withholding Tax

Depending on your country of residence, we may be legally required to deduct German withholding tax from certain royalty payments before forwarding the payout to you.

Withholding tax is not an additional dig dis! fee. It is a tax deduction that we may be legally required to withhold and remit to the German tax authorities.

Does withholding tax apply to my country?

German withholding tax rules may apply to royalty payments made to rights holders who are resident outside Germany.

Whether tax ultimately has to be withheld, and at which rate, depends on several factors, including:

• your country of residence,
• whether a Double Taxation Agreement (DTA) exists between Germany and your country,
• the provisions of the applicable DTA,
• the type of royalty payment,
• the total amount paid to you during the respective calendar year, and
• whether a valid tax exemption or reduced-rate approval is available.

Under German domestic law, the standard withholding tax rate for relevant royalty payments is generally 15% plus solidarity surcharge. A DTA may reduce this rate or allocate the taxation right entirely to your country of residence.

Country-specific DTA rates

The following overview shows the general DTA royalty rates that may be available for payments from Germany.

* Where more than one rate is shown, the applicable rate depends on factors such as the type of royalty or licensed right and the specific provisions of the relevant DTA.

There are special cases in which an existing or previous treaty cannot currently be relied upon in the usual way. This currently includes, for example, Belarus, Russia and the United Arab Emirates. For these and other countries not listed above, we will determine whether treaty relief or another exemption is available.

Important: The DTA rate shown above is not necessarily the amount that can automatically be applied to your payout.

For example, a country with a 0% DTA rate does not automatically mean that dig dis! can always make payments without withholding tax. Depending on the amount paid during the calendar year, we may require a valid German withholding tax exemption certificate (Freistellungsbescheinigung) before the DTA benefit can be applied.

The applicable rules and tax treaties can change. The rules in effect at the time of payment are therefore decisive.

Withholding Tax Threshold

For certain royalty payments, German tax law provides a simplified procedure that allows the applicable DTA rate to be used without a separate exemption certificate, provided the relevant requirements are met.

This simplified procedure is available only as long as the total relevant remuneration paid by dig dis! to the same recipient within a calendar year does not exceed €10,000.

The relevant date is the payment date, not the invoice date.

Example

• €8,000 invoiced on March 1, 2026 and paid on March 31, 2026
• €2,001 invoiced on June 1, 2026 and paid on July 1, 2026

With the second payment, the total amount paid during 2026 reaches €10,001 and therefore exceeds the €10,000 threshold.

What does this mean in this example?

The first payment of €8,000 remains unaffected. No withholding tax has to be applied retroactively to this payment solely because the threshold is exceeded later in the year.

However, the simplified €10,000 procedure can no longer be applied to the second payment of €2,001.

This means that, unless an appropriate exemption certificate or other applicable relief is already in place, withholding tax must generally be applied to the full €2,001 payment – not just to the €1 that exceeds the threshold.

In other words:

• €8,000 first payment: remains covered by the simplified procedure
• €1 exceeding the threshold: is not taxed separately
• €2,001 second payment: the full payment is affected once the threshold is exceeded

The same principle applies to further relevant payments made during the remainder of that calendar year.

On January 1 of each new calendar year, the calculation starts again from zero.

Please note that the €10,000 threshold does not mean that withholding tax generally applies only to income above €10,000. It is a simplified procedure for applying DTA relief without a separate exemption certificate.

Which tax documents are required?

Depending on your situation, we may ask you for a certificate confirming your tax residence, your local tax number or information needed to apply for a German withholding tax exemption.

If an application to the German Federal Central Tax Office (BZSt) is required, we will let you know what we need from you.

Please note that submitting an application does not automatically mean that we can stop withholding tax immediately. If an exemption certificate is required, it normally needs to be available before the payment is made.

What happens if withholding tax is deducted?

If withholding tax was deducted from your payment, you may be able to claim a tax credit or otherwise take the deduction into account in your country of residence in order to avoid double taxation.

Upon request, we can provide a tax certificate for the relevant year. You can submit this certificate to your tax advisor or local tax authority.

Please note:

1. The applicable withholding tax treatment depends on your country of residence, the applicable tax treaty, the type of royalty payment and the tax documents available.
2. A reduced rate or exemption may require prior approval from the German Federal Central Tax Office.
3. Processing times at tax authorities are outside of our control.
4. Tax treaties and applicable rates may change over time.
5. We cannot provide individual tax advice. For questions about your personal tax situation, please contact your tax advisor or local tax authority.

If you have questions about withholding tax deductions, tax certificates or payment-related tax documents, please contact us.

You can also read more about withholding tax under German law here: Withholding Taxes.