Term used in the German Income Tax Act (EStG) and relevant with regard to limited tax liability. Limited tax liability applies if income is generated in a country where a taxable person has no permanent abode or residence - referred to as the source country. The payment debtor, i.e. the organizer/client, is required to pay the income tax to the tax authorities in the source country. The payment debtor must calculate the applicable tax in advance, deduct it from the remuneration (withholding tax), and pay it to the tax office. This deduction is considered a credit method: in order to avoid double taxation on work abroad, the deduction is credited by the tax authorities in the country of residence.
Source: EStG (only available in German), Wikipedia, redaktionell bearbeitet