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HMRC internal manual

Double Taxation Relief Manual

Double Taxation Relief Manual: Guidance by country: Germany: Underlying Tax

Documents needed to support the underlying tax claim

The accounts covering the period of profits out of which the dividend was paid, the corporation tax/solidarity surcharge assessment (Bescheid fur [tax year] uber Korperschaftsteuer und Solidaritatszuschlag) and the trade tax assessments (Gewerbesteuerbescheid) will be required by the Underlying Tax Group.

Profits for accounting periods ended in 2008 are assessed in the tax year 2008.

Treatment of credits/reductions of corporation tax

  • If the German company has received a dividend from a subsidiary company, the corporation tax must be reduced by any credit (anzurechnende Korperschaftsteuer) shown on the assessment. Where relief is claimed for the underlying tax carried by this dividend, the documents from the company paying the dividend should also be provided.
  • The corporation tax and solidarity surcharge amounts are not required to be reduced by the credits of withholding tax on capital (anzurechnende Kapitalertragsteuer/ Solidaritatszuschlag).
  • For dividends paid to the UK after 31 December 2001, the reduction of corporation tax (die Minderung der Korperschaftsteuer) must be dealt with in accordance with Statement of Practice SP03/01, i.e. the underlying tax carried by the dividend must be calculated first and then the reduction taken off.


For entities in an organschaft arrangement (where a dominant entity pays the corporation and/or trade taxes on behalf the others in the group), the members of the organschaft can be treated as falling within the consolidation rules of Section 803A ICTA 1988 (Tax Bulletin TB57 refers).