Withholding tax for artists
May 16, 2014 | 30,00 EUR | answered by StB Patrick Färber
Hello,
I live in Germany and work as a freelance musician. Starting in August 2014, I will be conducting a choir in Switzerland and will receive a corresponding monthly fee.
My questions are:
1. whether this fee is subject to withholding tax in Switzerland
2. if so, how it will be taxed in Germany
3. whether I can deduct travel expenses for German income tax as I do for my self-employed activities within Germany
Thank you very much!
Kind regards
Dear questioner,
Your question No. 1 concerns Swiss tax law and cannot be answered by a German tax advisor. I have consulted my Swiss colleagues and provide their response without claiming to be complete and correct:
1) Your activity is subject to withholding tax in Switzerland. The amount can be found on the Swiss tax administration's website; depending on the canton and the amount of the fee, the withholding tax can range from 8% to 30%. Your client must deduct this tax. For details, please contact a Swiss tax advisor.
2) Taxation
Under the double taxation agreement, Switzerland and Germany have the right to tax, meaning Switzerland withholds the tax at source and you must fully declare these fees in Germany, but you can deduct the Swiss withholding tax directly from your German income tax liability. As a result, you are taxed at the German tax rate.
3) Travel expenses
Since you declare the income in Germany, you can also claim relevant travel expenses as business expenses there.
I hope this overview has been helpful.
Best regards,
Patrick Färber, Tax Advisor
