A pop-up permanent establishment abroad does not cancel out German tax access!

If you do business abroad, you should check whether you have a foreign permanent establishment under the relevant double taxation agreement so that you can transfer your profits abroad.

There is a new ruling by the Federal Fiscal Court that you should definitely be aware of.

The dispute:

German businessmen briefly operated a gold trading business in the UK through a British company. For this purpose, they rented an office in London with two workstations for six months. They only carried out their business activities there for one month.

They wanted to withdraw the profits they made in London from German taxation, for which they appealed to the Federal Fiscal Court.

The decision:

However, the federal judges ruled that a permanent establishment under tax treaty law only exists if it has existed for at least six months.

In this case, this minimum period was not met. The foreign profits therefore had to be taxed in Germany after all.

👉 Would you like to get involved abroad as a company?

Make sure you contact us in advance! We know our way around international tax law and ensure that your move across borders does not become a tax fiasco.
Contact us now: www.wsb-berater.com/kontakt

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