Direct transactions take place between foreign investors

When direct transactions take place between foreign investors
and domestic customers, it is not required to establish a per-
manent basis in Germany such as domestic permanent estab-
lishments and/or permanent representatives, partnerships or
corporations. The income derived from such direct transactions/
investments by foreign investors, whether individuals or legal en-
tities, might be subject to non-resident tax liability (beschränkte
Steuerpficht,) in Germany. The following ex-
amples provide an overview of major forms of direct transactions
and direct investments as well as of their tax treatment.

Imports: In principle, no income tax accrues when a foreign
investor has neither a permanent establishment, a permanent
representative, nor a business entity (company or partnership)
in Germany. Imports from other countries to Germany are in
themselves not taxable events under German income tax law.

Imports of goods are not considered as investments in the strict
sense of the word, because no real or monetary capital remains
for the foreign investor to support any economic activity in the
domestic territory.