The German Federal Ministry of Finance published a guidance letter on 29 June 2022 that extends the simplified procedure provided in a prior guidance letter dated 11 February 2021 concerning the obligation to submit tax returns for limited tax liability in relation to intellectual property (IP) rights registered in German registers (German-nexus IP). The February 2021 guidance letter provided simplified procedures in relation to the temporary transfer of rights in cases where a non-resident would be subject to limited tax liability in Germany solely because the IP rights are registered in Germany. In such cases, it was provided that it is not necessary to deduct tax or file a tax return for royalty payments (remuneration) that have already been received or are payable up to 30 September 2021 if the following conditions are met:

• The payer of the remuneration is not resident in Germany;
• The recipient of the remuneration is resident in a country with which Germany has an applicable tax treaty when the remuneration is received;
• The recipient is eligible for the benefits of the tax treaty; and
• The payer or recipient requests a certificate of exemption by 31 December 2021, which may be requested with retroactive effect if necessary.

The simplified procedure was subsequently extended by a guidance letter dated 14 July 2021 to cover royalty payments made after 30 September 2021 but before 1 July 2022. Under the latest guidance letter dated 29 June 2022, the simplified procedure is further extended to cover payments made after 30 June 2022 but before 1 July 2023, with requests for a certificate of exemption required by 30 June 2023

In addition to the guidance letter, the Ministry of Finance has also published its report evaluating the current legal situation with regard to the taxation of German-nexus IP. This includes the original German-language report as well as an English translation. Further, the Ministry is reportedly planning to submit proposed legislation to parliament in the near future that would abolish the controversial provisions that provide for the taxation of the temporary or indefinite transfer of German-nexus IP.