taxable “permanent establishment”
Foreign exporters who wish to station their own employees in Germany or to
appoint their own German representatives may well meet the preconditions of a
taxable “permanent establishment” in Germany under the terms of the relevant
double tax treaty. Effectively, part of the net profit earned on the sale of the
goods to German customers then becomes chargeable to German income taxes
and the foreign business is subject to German accounting and record-keeping
requirements.
It is also quite usual for a foreign business to establish a German sales
subsidiary or branch to regularly and systematically exploit the German market.
There are usually no fundamental reasons why this should be impracticable,
although it does lead to taxation in Germany.
EU Forecast
euf:ba18e:52/nws-01