Not long ago, the topic of withholding tax on online advertising, such as Google Ads, was on everyone’s lips. Also with me one finds the appropriate profound articles to it.

Now, however, the issue has been resolved, as the federal and state governments have agreed not to subject expenses for online advertising to withholding tax.

This has been pointed out by the Bavarian State Ministry of Finance and Home Affairs. So companies that spend a lot of money on online advertising no longer have to worry about domestic companies possibly having to withhold tax or, in the worst case, being stuck with the costs.

The responsible authorities now claim that an obligation to deduct tax at source would have resulted in considerable additional bureaucracy and would have led to massive back taxes, which would have burdened domestic companies in particular.

If a company has formed provisions, these can/must now be reversed.