8

As regards the taxation of dividends distributed to a company whose registered office is not established in Germany, Paragraph 32(5) of the KStG is worded as follows: ‘(5) Where the corporation tax owed by the creditor on income from capital within the meaning of point 1 of Paragraph 20(1) of [the EStG] has been definitively disposed of in accordance with subparagraph 1 [hereof], the tax on income from capital which has been withheld and paid shall, on application, be reimbursed to the creditor of the income from capital in accordance with point 2 of Paragraph 36(2) of [the EStG], where 1. the creditor of the income from capital is a company subject to limited tax liability as provided for in Paragraph 2(1), which (a) is also a company within the meaning of Article 54 [TFEU] or Article 34 of [the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3)], (b) has its registered office and centre of effective management within the territory of a Member State of the European Union or a State to which the [EEA Agreement] is applicable, (c) is subject, in the State of its centre of effective management, to non-optional, unlimited tax liability comparable to that referred to in Paragraph 1, and is not exempt therefrom, and 2. the creditor has a direct holding in the initial capital or share capital of the debtor of the income from capital and does not meet the minimum participation threshold laid down in Paragraph 43b(2) of [the EStG]. Sentence 1 shall apply only in so far as 1. reimbursement of the tax on income from capital in question is not available under any other provision, 2. the income from capital would not be taken into account in the calculation of income, in accordance with Paragraph 8b(1), 3. the income from capital is not attributed, under provisions in another country, to any person who would not be entitled to reimbursement pursuant to this subparagraph if he or she were to receive the income from capital directly, 4. a right to full or partial reimbursement of the tax on income from capital would not be excluded if Paragraph 50d(3) of [the EStG] were applied mutatis mutandis, and 5. the creditor or a shareholder having a direct or indirect equity holding in the creditor cannot offset the tax on income from capital or deduct it as an operating cost or as work-related outgoings; the possibility of carrying forward a set-off shall be treated as a set-off. The creditor of the income from capital shall provide proof of compliance with the conditions of reimbursement. In particular, he or she shall prove, by way of a certificate from the tax authorities of his or her country of residence, that he or she is regarded as being resident for tax purposes in that country, is subject to unlimited corporation tax liability there, is not exempt from corporation tax and is the actual recipient of the income from capital. The certificate from the foreign tax administration shall show that the German tax on income from capital cannot be offset, deducted or carried forward and that no set-off, deduction or carry-forward has actually taken place either. The tax on income from capital shall be reimbursed in relation to all income from capital received in a calendar year within the meaning of the first sentence on the basis of an exemption notice as provided for in the third sentence of Paragraph 155(1) of the Abgabenordnung [(German Tax Code)].’