Term used in the German Income Tax Act (§ 50 (5) EStG) and relevant with regard to limited tax liability, for example that of foreign artists who earn income in Germany. The payment debtor is a natural or legal person who pays the remuneration or fee, i.e. who owes payment, for example the organizer. He or she checks which country is assigned the complete or partial right of taxation if a double taxation agreement (DTA)is in place. He or she is also obliged to withhold income tax (withholding tax) and to pay this tax to the authorities. In such cases, the current legislation places the onus on the contractual party living in Germany to ensure that the tax owed is paid as appropriate (see also Ausländersteuer/Foreigner tax). The tax falls due at the time at which the remuneration is paid to the creditor. The payment debtor must then withhold tax from the remuneration; the creditor’s invoice forms the basis for tax assessment. The payment debtor must pay the tax withheld within a given calendar quarter to the German Federal Central Tax Office by the tenth day of the month following the end of the respective calendar quarter.

Source: EStG (only available in German), Bundeszentralamt für Steuern (BZSt), edited