Constituting a permanent establishment for tax purposes in Germany often entails considerable tax risks, as permanent establishments are often not recognized and / or properly registered too late or not at all. In additional to a permanent establishment created by a fixed place of business in Germany, especially construction and installation projects in Germany as well as permanent representatives can lead to a German permanent establishment from a tax perspective. Appropriate internal guidelines and raising awareness among the relevant employees are essential in a company that operates beyond ..read more

Overview and updates of German transfer pricing regulations On 06 June 2023 the German Ministry of Finance issued updated administrative principles on transfer pricing, clarifying and specifying German transfer pricing regulations as per the German Foreign Tax Act. Because transfer prices are increasingly a major issue in German tax audits not only of large multinational groups but also of small and medium-sized businesses, this article provides a general overview of Germany’s transfer pricing regulations as well as the updated principles recently issued. Every organization doing business in G ..read more

Germany – Avoiding obstacles for inbound UK investors and businesses As one of the strongest economies in the world, situated in a unique location in the heart of Europe, Germany is a great place to do business. A highly skilled available workforce, a political stable environment along with the availability of both, large multinational corporations as well as small and medium sized businesses are further reasons to conduct business in Germany. This has been true also for UK investors and businesses who have historically held strong business relations to Germany and vice versa. BREXIT has howev ..read more

Risk of a permanent establishment in Germany Germany as the motor of the European economy has been an attractive market for foreign investors and global enterprises. More and more inbound business acitivities are generated in the recent years. With the erosion of physical borders, business activities can be easily enacted without any significant presence. However with the growing activities more often the need for a phyisical presence or staff in Germany is generated. Unfortunately the risk of constituting a Germany permanent establishment ist all to often underestimate or even neglected. This ..read more

The draft coalition agreement of the new German government coalition also provides for different tax measures on its 178 pages. We have summarized the key proposed measures hereafter for you. The main tax changes are: In 2022 and 2023, deduct a proportion of the acquisition and production costs of the fixed assets purchased or manufactured in the respective year, which serve climate protection in a special way, from the tax profit (“super depreciation“). Prolong the extended loss offsetting provisions until the end of 2023 and extend the loss carry-carryback to the two immediately preceding a ..read more

Germany is the largest economy in Europe and one of the most important markets in the world. The interest for foreign companies who want to sell products or provide services in the German market is steadily growing in recent years. In addition, German business entities are regularly a target of foreign business investors. In any case, foreign companies and investors have toconsider the complex German tax regulations in order to avoid unnecessary risks. The following 10 tax issues should be considered when planning to enter intothe German market. 01. Different forms of business engagements in G ..read more

01. Underestimating the German bureaucracy. Yes, it can be even worse than expected. The German system is very bureaucratic and there is no real viable way around it: Paper forms have tobe filled out and it does take some time to finalize the official processes. But no need to worry. We are happy to guide you through the entire process of acquiring, maintaining and selling real estate in Germany or helping you with any ongoing issues. 02. Assuming that the English language can be used when communicating with German authorities While the level of English proficiency is rather high in Germany –i ..read more

01. Underestimating the German bureaucracy Yes, it can be even worse than expected. The German system is very bureaucratic and there is no real viable way around it: Paper forms have to be filled out and it does take some time to finalize the official processes. But no need to worry. We are happy to guide you through the entire process of setting up a business in Germany or helping you with any ongoing issues. 02. Assuming that the English language can be used when communicating with German authorities While the level of English proficiency is rather high in Germany – it´s typically the first ..read more

I. Background Anyone can establish a business in Germany – irrespective of nationality or place of residence. There is no specific investment legislation in Germany, nor is there a minimum percentage of German shareholdings (sponsorship) required for foreign entrepreneurs setting up a business. Foreign investors can choose between a variety of legal forms for conducting business in Germany. German company law offers a suitable legal structure for every type of business. One of the most important and common corporate forms under German law is the GmbH. A GmbH is specifically designed to meet th ..read more