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CMS Hasche Sigle team obtains a landmark decision on income tax for WDR before the Federal Finance Court

23/10/2006

CMS Hasche Sigle has obtained a landmark decision on liability for income tax of public law radiostations for repeat fees paid to employees and freelance workers before the Federal Finance Court.

Owing to contractual agreements regarding the use of copyrights Westdeutsche Rundfunk inCologne is obliged to pay its employees and freelance workers fee percentages where programmes arerepeated.

The focus of the dispute was whether WDR can be held liable for any income tax hereon. Thequestions of whether such payments are subject to income tax at all and whether the financeauthorities have committed an error in due discretion if they claim small amounts from the employerwere also raised.

The decision will set a precedent for all public and private law radio stations (Why or whatwill happen now?). The Federal Finance Court has decided that such payments are not subject toincome tax. Repeat fees are paid on the basis of special legal relationships justified by copyrightlaw.

Advisers to WDR

CMS Hasche Sigle (Cologne)

Dr Herbert Wiehe (Lead Partner)

Dr Matthias Kappus (Employment)

Dr Pietro Graf Fringuelli (Copyright)

CMS Hasche Sigle (Munich)

Dr Gerd Seeliger (Tax)

Dr Angelika Thies (Tax)

Contact CMS Hasche Sigle:

Dr Herbert Wiehe

Tel.:+49 (0) 221 / 77 16 - 228

E-mail: [email protected]

About CMS Hasche Sigle:

CMS Hasche Sigle is one of the leading German law firms with more than 450 lawyers. It coversthe entire area of commercial law and provides legal advice to major German and internationalcompanies from a wide spectrum of industry. CMS Hasche Sigle operates at all the major businesscentres. It has offices in Berlin, Cologne, Duesseldorf, Frankfurt, Hamburg, Leipzig, Munich,Stuttgart, Chemnitz, Dresden, Brussels, Belgrade, Moscow, Prague and Shanghai.

CMS Hasche Sigle is a partnership of lawyers and tax consultants; for register details / listof partners see www.cms-hs.com

CMS Hasche Sigle is a member of CMS, an alliance of leading European law firms. With over 595partners, a total of 2,000 lawyers and tax consultants and around 4,200 support staff we advise ourclients at commercial locations in 47 business centres in Europe and further afield on legal andtax issues.

Local strength, legal and tax advice tailored to the requirements of the market combined witha substantial amount of business and organisational integration form the basis for high-qualityinternational legal advice.

In addition to CMS Hasche Sigle, the following firms are also members of the CMS alliance:CMS Adonnino Ascoli & Cavasola Scamoni (Italy), CMS Albiñana & Suárez de Lezo (Spain), CMSBureau Francis Lefebvre (France), CMS Cameron McKenna LLP (Great Britain), CMS DeBacker (Belgium),CMS Derks Star Busmann (the Netherlands), CMS von Erlach Henrici (Switzerland) and CMSReich-Rohrwig Hainz (Austria). CMS has 57 offices in 23 countries in Western and Central Europe,North and South America, Asia and North Africa.

For further information on CMS Hasche Sigle see www.cms-hs.com and on the CMS alliance see http:// www.cmslegal.com .