Investment through a domestic partnership

Under international tax law, the ownership interest in a domestic
partnership held by a foreign partner is generally considered as
a foreign enterprise with a German permanent establishment. A
partnership is not itself a taxable entity for income tax purposes.

Its income is determined at the level of the partnership, but
taxed in the hands of the partners. However, a partnership is a
taxable entity for trade tax purposes (Gewerbesteuer) if its busi-
ness activity or its legal form constitutes a commercial activity.

A number of different forms of partnership are available.