Permanent overpayment certificate

May 29, 2024

Due to their activities, pure holding corporations regularly only receive dividends from their subsidiaries. As a rule, 95% of these are tax-free in accordance with Section 8b KStG (shareholding > 10%) and Section 9 No. 2a GewStG (shareholding > 15%). This results in a combined income tax rate of approx. 1.5%. If capital gains tax of 25% is withheld on the distribution, this leads to considerable refunds and the liquidity is not available during the year.

In order to be able to distribute dividends without withholding tax, a permanent overpayment certificate can be applied for in accordance with Section 44a (5) sentence 4 EStG. The BFH has now strengthened the rights of companies in its ruling of 12.12.2023 (VIII R 31/21). In its opinion, the certificate must be issued by the FA as a rule. Furthermore, it is not important that the company could also take up another activity according to the purpose of the articles of association, but whether it actually carries out another activity (apart from the holding function).

Permanent overpayer certificates should now be issued more quickly and regularly by the tax office following this ruling.