International Taxation Law

Inbound

For foreign companies already with existing business relations in Germany or those looking to do business here, we can demonstrate which legal form will obtain the most beneficial taxation results:

• Direct business with no national base
• Setting up a permanent establishment (dependent part of head office)
• Participation in or foundation of a partnership
• Subsidiary (foundation of an independent capital company)

Besides optimising taxation, other factors will generally play a key role in the choice of legal form, in particular:

• Limitation of liability
• Change of shareholders
• Capital procurement
• estrictions on capital transactions

Ideally, advice should be obtained jointly from both a tax consultant and lawyers in such cases.

Outbound

For domestic companies with existing business relations abroad or planning to enter a market abroad, the same essentially applies as for inbound cases. Repatriation of profits obtained abroad is of particular interest here.

Ideally we cooperate with tax consultants and lawyers of our clients or recommend our own foreign co-operation partners.

Expats

For nationals who work for an employer in another country, it is important to avoid double taxation both abroad and at home, or at least to minimise this. As a rule, it is important to clarify the extent to which foreign taxation will be due and whether or to what degree this can be credited to German tax or else is exempt from taxation by the German fiscal authorities.

Impats

For foreign nationals earning their living in Germany, it is also important to avoid double taxation both here and abroad, or at least to minimize this. As a rule, it is important to clarify whether German taxation claims are accounted for or whether a separate income tax assessment would provide a better result.

Artists and Sportspersons

When performing or competing, such individuals are often subject to a tax deduction at source, usually by the event organiser. This preliminary deduction can be avoided or at least added on to the tax deducted later on.

Inheritance Tax

The rise in globalisation inevitably goes hand-in-hand with the worldwide distribution of assets. Family relationships are at the same time increasingly no longer restricted to one nation meaning that, in case of an inheritance, at least two states are entitled to claim taxation on the sum.

Avoiding or reducing profit taxes (income tax, commercial tax and corporate tax) is regulated by around 100 treaties in Germany designed to prevent double taxation. At present however, there are only six double taxation agreements in place for inheritance tax (Denmark, Greece, France, Sweden, Switzerland, USA).

Since inheritances may lead to considerable assets being transferred, double taxation can often have disastrous consequences for tangible assets. Careful planning is therefore highly recommended in this sensitive area.