The Act proposes to eliminate the nonresident taxation of certain royalty income and capital gains relating to rights solely because these rights are registered in a public German book or register. This is a key development in the debated issue of German extraterritorial taxation of IP. The proposal would abolish extraterritorial taxation of IP to the largest extent as of 2023 and retroactively for transactions between unrelated parties.It is currently unclear whether and when the draft will become actual law, but this proposal should be considered by taxpayers dealing with the issue and assessing next steps.Executive summaryOn 28 July 2022,...