Risk of a permanent establishment in Germany.
Germany as the engine of the European economy has been an attractive market for foreign investors and global enterprises. More and more inbound business activities are generated in recent years. With the erosion of physical boundariesbusiness activities can be easily enacted without any significant presence.
However, with the growing activities more often the need for a physical presence or staff in Germany is generated. Unfortunately, the risk of constituting a permanent establishment in Germany is all too often underestimated or even neglected. This bears significant risks. The permanent establishment is the nexus for taxation in Germany. Constituting a PE can have significant consequences. Failing to register a PE and fulfill the associated filing obligations can result in significant fines.
Therefore, we regularly assess our foreign based clients regularly assess the risk of constituting a PE in Germany.
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