• Tell a friend
• Print
• Share
  • Twitter
  • Facebook
  • XING
  • LinkedIn
  • Mister Wong

Business case:

A Chinese company employs workers in Germany. The employees work from a home office. The Chinese company does not hold an office in Germany. The employees promote the company's products to prospective clients in Germany. The workers do not have the right to conclude contracts on behalf of the Chinese company.

Business challenge:

We have been asked to conduct a status report whether there is a risk that the Chinese company will enter a permanent establishment in Germany. A permanent establishment in Germany would raise the following concerns:

• May Germany levy tax on the profits of the permanent establishment?
• How are profits divided between the company and the permanent establishment?
• How does Germany tax the profits of a permanent establishment?

To stay compliant with the German tax regulations, Consultinghouse legal services supported the company in evaluating the working relationship between the Chinese company and it's workers in Germany.

Questions to be considered:

• Double Tax Treaty or national law applicable?
• Fixed place of business?
• Conduction of company's operations?
• Exemption rules?
• Empowered to conclude contracts on company's behalf?

How we helped:

Consultinghouse's legal services team helped clarify the legal status of the Chinese company's activities in Germany.

We help companies to plan their activities in Germany to minimize the risk of their permanent establishment.