DT7907 - Germany, Federal Republic of: Dividends

The German tax deducted from dividends at the agreement rate (see DT7908) qualifies for credit as a direct tax (see INTM164010(c)). The reduction to the agreement rate is not given unless the dividend is subject to United Kingdom tax and is not attributable to a permanent establishment which the United Kingdom resident recipient has in Germany.

A United Kingdom company controlling, directly or indirectly, at least 25 per cent of the voting power in the German company paying the dividend is entitled, under the agreement, to credit for the underlying tax (see INTM164010(d)) (Article 18(l)(b) - Article 9 of the amending agreement). Where the control is at least 10 per cent and not more than 25 per cent, relief will be due unilaterally for the underlying tax.