If you are located in a country other than Germany, a tax deduction may have to be made from your earnings. This is because we are generally obliged to withhold a tax of 15% of the earnings from the design price (withholding tax) plus 5.5% solidarity surcharge on the withholding tax. If you are located in a country that has a double taxation agreement with Germany, you may be able to avoid or reduce the deduction.
Do I need to pay withholding tax?
To find out how much the tax deduction is for you, choose the situation that applies to you below. This overview shows whether the country in which you are located has concluded a double taxation agreement with Germany.
Click on the situation relevant to you:
- 1. Country of residence or headquarters in Germany
- 2. Residence in a country with a double taxation agreement with Germany
- 3. Residence in a country without a double taxation agreement with Germany
1. Country of residence or headquarters in Germany
A tax deduction is not made. You don’t need to provide a Tax Identification Number. As long as your name and your address information are correct, you’ll be paid your remuneration in full. However, if your name and address are not correct, we will be unable to pay you. Check your address details here.
2. Residence in a country with a double taxation agreement with Germany
Name and address
The correct specification of your name and address data is a mandatory requirement in order to receive a payout. Check your address details here.
Tax deduction
In principle, we have to make a tax deduction (15% withholding tax plus 5.5% solidarity surcharge on the withholding tax) from your remuneration from the Design Award when it is paid out. Spreadshirt will declare and pay the withheld tax to Germany’s Federal Central Tax Office (BZSt).
Spreadshirt will provide you with a tax certificate for the tax deduction made upon request. If you present this tax certificate, it may be possible for the withheld tax to be considered as part of your personal tax assessment.
Sample calculation:
Tax deduction for a marketplace designer with residency in Belgium
€100 design price earnings
-€15 (15% withholding tax)
-€0.82 (5.5% solidarity supplement on withholding tax)
= €84.18 payment of design price earnings
In this example, Spreadshirt is required to declare and pay €15.82 in tax to Germany’s Federal Central Tax Office.
Control reporting procedure (abolished since 2022)
Until the end of 2021, it was possible to have the design price earnings paid out in full via the so-called control notification procedure (KMV). However, the KMV was repealed by law on 01.01.2022. As a result, Spreadshirt's authorization to continue to apply the KMV from the Germany’s Federal Central Tax Office will expire from 2022. Therefore, when your credit is paid out in January 2022, the KMV will no longer apply. From 2022, tax relief will only be possible by submitting a separate application in the form of an exemption certificate.
Certificate of exemption
You can request a certificate of exemption (Freistellungsbescheinigung) from Germany’s Federal Central Tax Office (BZSt). You can find the application for a certificate of exemption (Freistellungsbescheinigung) on Germany’s Federal Central Tax Office website. Scroll down to licenses (Lizenzen) and select the appropriate form for your country of residence in your language. Send the completed application to the Germany’s Federal Central Tax Office. As soon as your application is approved, you will receive your exemption certificate, which you should then send to us by e-mail. If you hold a notice of non-liability for tax at the time of payout, no tax deduction will be performed. In the case of individual states, a residual tax rate must be taken into account in this context, so that the remuneration from the design award must be reduced by a reduced tax rate. The applicable tax rate is determined by the double taxation treaty that your country of residence has concluded with Germany.
The following applies in all cases:
We would like to point out that the German revenue authorities may inform the local tax office of your place of residence about your earnings.
3. Residence in a country without a double taxation agreement with Germany
Name and address
The correct specification of your name and address data is a mandatory requirement in order to receive a payout. Check your address details here.
Tax deduction
In principle, we have to make a tax deduction (15% withholding tax plus 5.5% solidarity surcharge on the withholding tax) from your remuneration from the Design Award when it is paid out. Spreadshirt will declare and pay the withheld tax to Germany’s Federal Central Tax Office (BZSt).
Spreadshirt will provide you with a tax certificate for the tax deduction made upon request. If you present this tax certificate, it may be possible for the withheld tax to be considered as part of your personal tax assessment.
Sample calculation:
Tax deduction for a marketplace designer with residency in Belgium
€100 design price earnings
-€15 (15% withholding tax)
-€0.82 (5.5% solidarity supplement on withholding tax)
= €84.18 payment of design price earnings
In this example, Spreadshirt is obliged to register and transfer tax in the amount of €15.82 to the Federal Central Tax Office of Germany.
The following applies in all cases:
We would like to point out that the German revenue authorities may inform the local tax office of your place of residence about your earnings.
Please note: The information provided on this page should not be regarded as official tax advice or used to support tax items. Please contact your accountant for tax advice.