Exit taxation

The transfer of any of the permanent establishment’s assets to
a foreign head offce or a foreign permanent establishment of
the same taxpayer generally results in the immediate taxation
of such asset’s hidden reserves. If the assets are transferred to
another EU Member State, non-resident taxpayers, in contrast
to resident taxpayers, may not spread out their tax payments for
such hidden reserves over a period of fve years.

Gains on the sale of a permanent establishment are deemed to
be current profit and are thus subject to non-resident tax liability.
Germany’s tax treaties generally permit the taxation of gains on
the sale of a permanent establishment.