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As a rule, licensing and use of rights agreements abroad trigger withholding tax liability – and it’s right here that considerable risks arise in practice. This is how tax deduction in accordance with section 50a of the Income Tax Act [Einkommensteuergesetz–EStG] is often overlooked or misapplied and inadequately formulated in the underlying contracts – with consequences of liability to match for the licensee in Germany. A Withholding Tax Health Check helps, firstly, to identify these kinds of issues, to check processes and responsibilities and to close the interface between the specialist departments and the tax department – before a tax audit does.

In practice, cross-border business activities between Germany and Switzerland involve numerous tax and customs issues. Errors often arise not because of a lack of specialist knowledge, but due to the complex interfaces between different types of taxes, processes and organisational units. A structured VAT and customs health check creates transparency, identifies risks early and points out specific potential for optimisation – before any issues arise with tax or customs authorities.