If you’re unsure of whether your country of residence (or company headquarters) has a double tax agreement with Germany and which percentage of tax deduction needs to be applied, you can look it up in this list.
Name and address data
Stating your correct name and address are legal prerequisites for receiving payments.
TIN
You also need to state your correct TIN. If you do not state the correct TIN, we will keep 15% of your design price earnings (withholding tax) plus an additional 5.5% solidarity supplement on the withholding tax (obligatory in Germany). Spreadshirt will declare and transfer the amount to the Federal Central Tax Office of Germany.
If your monthly design price earnings don’t exceed €5,500 and/or the annual design price earnings are below €40,000, a permissive recording procedure with the Federal Central Tax Office is possible. In Germany, this recording procedure is called KMV.
If the TIN has not been stated correctly and KMV is in force, the design price earnings are only subjected to a reduced tax rate before the remaining amount is paid out.
The Partner receives a certificate for tax purposes with regard to the tax deduction that was carried out. Upon submission of this certificate, an allowance of the withheld tax for the purpose of the Partner’s tax assessment may be possible.
Earnings of more than €5,500 per month / €40,000 per year
If your design price earnings exceed one or both of these amounts, the application of KMV is no longer possible once a payment that fell in this bracket has been carried out. From the date of its coming into force, 15% of your design price earnings (withholding tax), plus an additional 5.5% solidarity supplement on the withholding tax (obligatory in Germany), will be withheld. All other earnings (Affiliate Commission and Volume Commission) will still be paid out in full.
You can ask for a written release of a notice of non-liability for tax (Freistellungsbescheinigung) at the Federal Central Tax Office of Germany. The procedure is subject to §50d sect. 2 Income Tax Act (EStG). If you should hold a valid notice of non-liability for tax (Freistellungsbescheinigung) at the time of the payout, the design price earnings will be subjected to a reduced tax rate before the payment is carried out.
If you do not have a notice of non-liability for tax (Freistellungsbescheinigung) while exceeding the statutory limits – or if you have indicated a wrong TIN and tax deduction couldn’t performed properly – you can apply for an in-part reimbursement of the money paid to the tax office (based on §50d sect. 2 EStG) at the Federal Central Tax Office of Germany. In principle, the period enforceable is four years upon expiry of the calendar year in which the remuneration took place.
The Partner receives a certificate for tax purposes with regard to the tax deduction that was carried out. Upon submission of this certificate, an allowance of the withheld tax for the purpose of the Partner’s tax assessment may be possible.
What always applies in all cases:
We would like to point out that the German tax authorities may inform the local tax office of your place of residence (or company headquarters) about your earnings.
Sample calculation
Tax deduction for a Partner with a residence (or company headquarters) in Ukraine (5% withholding tax)
€100 design price earnings
-€5 (5% withholding tax)
-€0.27 (5.5% solidarity supplement on withholding tax)
= €94.73 payment of design price earnings
In this example, Spreadshirt is obliged to register and transfer tax in the amount of €5.27 to the Federal Central Tax Office of Germany.
The information provided on this site by no means serves as fiscal advice or tax consultancy, and is not designed to come to base taxation assessments on either. Please refer these matters to a professional tax consultant.