Germany – United States Tax Treaty
The Germany-United States tax treaty caps withholding on dividends at 15% for portfolio investors and 5% for qualifying direct investment, with interest payments fully exempt at 0%. Royalties are taxed at a uniform 0% across all categories. Private pensions are taxable only in the country of residence, with no withholding at source. This is one of 49 active treaties in Germany's network and one of 64 in United States's. The general dividend rate of 15% compares to a median of 15% across Germany's network and 15% across United States's.
Verified data
IRS Table 1 - Tax Rates on Income Other Than Personal Service Income (Rev. May 2023)
Withholding Rate Summary
Source: IRS Table 1 (Withholding Rates)| Income Type | Treaty Rate | Statutory Rate (United States) |
|---|---|---|
| Dividends (general) Portfolio investors | 15%saves 15% | 30% |
| Dividends (qualified) Beneficial owner is a company holding >= 10% of voting stock | 5%saves 25% | 30% |
| Interest Bank interest, bonds, loans | 0%saves 30% | 30% |
| Royalties (avg) Patents, copyright, know-how, film/TV | 0% | — |
| Pensions Private pension distributions | 0% | — |
| Social Security Government social security benefits | 0% | — |
“Treaty Rate” is the maximum withholding permitted under this treaty. The actual effective rate may be lower if domestic law provides a more favorable rate independently. “Statutory Rate (United States)” shows the rate that applies when no treaty benefit is claimed. Qualified dividend rate requires: Beneficial owner is a company holding >= 10% of voting stock.
Dividends
The general dividend rate of 15% applies to portfolio investors. A reduced rate of 5% is available when beneficial owner is a company holding >= 10% of voting stock. Without the treaty, the statutory withholding rate on dividends is 30%.
Source: IRS Table 1 (Withholding Rates)
Interest
Interest payments (bank interest, bonds, loans) are subject to 0% withholding under this treaty, compared to the 30% statutory rate. Interest is fully exempt from source-country withholding under this treaty.
Source: IRS Table 1 (Withholding Rates)
Royalties
Royalty withholding rates vary by the type of intellectual property. This treaty distinguishes 4 categories, with rates ranging from 0% to 0%.
Source: IRS Table 1 (Withholding Rates)
Pensions & Social Security
Private pension distributions are taxable only in the country of residence, with no withholding at source. Government social security benefits are exempt from source-country withholding.
Source: IRS Table 1 (Withholding Rates)
Comparative Context
🇩🇪Germany's Network
Among Germany's 49 active treaty partners, the 15% general dividend rate ranks 47th (median: 15%).
| Partner | Rate |
|---|---|
| Slovak Republic | 15% |
| Thailand | 15% |
| Turkey | 15% |
| United States (this treaty) | 15% |
| Vietnam | 15% |
| South Africa | 15% |
🇺🇸United States's Network
Among United States's 64 active treaty partners, the 15% general dividend rate ranks 22th (median: 15%).
| Partner | Rate |
|---|---|
| Colombia | 15% |
| Cyprus | 15% |
| Czech Republic | 15% |
| Germany (this treaty) | 15% |
| Denmark | 15% |
| Estonia | 15% |
| Egypt | 15% |