Flat rate in tax law

The highest tax authorities can apply to certain foreign income, z. B. from business or self-employment, waived German income tax or corporation tax or in one Lump sum stipulate if there are economic reasons or the application of the credit method is difficult.
With the flat rate (§ 34 c V EStG), a quick relief can be made possible in individual cases; it is based on one BMF letter, the so-called flat rate decree. The beneficiary foreign income may not come from a DTA country; 90 % of these must come from the manufacture and delivery of goods, the extraction of mineral resources and from commercial services (activity clause).

At the request of a tax resident, the tax is limited to a flat rate of 25 %. The flat rate is at the same time generally a limited instrument for simplification (tax simplification).

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