Introduction

The best part about working with OYECS is that you don't have to wait in line for long hours at the local tax offices anymore. Instead, our team of professional accountants and bookkeepers will handle all your year-end tax services online. The entire process is simple and hassle-free!

Permanent Representative Germany

Introduction

If you have clients in Europe or want to recruit local employees, it may be useful to set up a permanent representation in Germany. A Permanent Representative (PR) is an individual who represents their principal company in a specific territory. The appointment of an individual representative is required by law and must be registered with the tax authorities.

Tracking intercompany transactions between your mother company and your German subsidiary is perceived as one of the most common problems with financial consolidation.

Intercompany transactions are transactions that happen between two entities of the same company. Not adjusting intercompany transactions results in consolidated financial statements that do not offer a true and fair view of the group’s financial situation.

Intercompany eliminations (ICE) are made to remove the profit/loss arising from intercompany transactions. No intercompany receivables, payables, investments, capital, revenue, cost of sales, or profits and losses are recognised in consolidated financial statements until they are realised through a transaction with an unrelated party.

The total amount of unrealised profits/loss to be eliminated in intercompany transactions does not vary regardless of whether the subsidiary is wholly-owned (non-controlling interest, NCI, does not exist) or partially owned. However, if the subsidiary is partially owned (i.e., NCI exists), the elimination of such profit/loss may be allocated between the majority and minority interests.

Within the European Union, Businesses producing and trading feed must comply with regulation for quality assurance and supervision.

Important note: Every effort has been made to communicate the information as accurately as possible, and all pertinent subclauses of tax laws are referenced where applicable. However, please make sure to read the date of publication of this blog post in order to ascertain when it is outdated.

Companies operating in global markets are facing many complex tax issues in all jurisdictions which they are engaged in. For the companies and their advisors this requires an international perspective besides sound knowledge of country-specific tax and legal regulations.

Australia and Germany have entered into a new double taxation agreement (DTA). Both states have ratified the agreement signed already in 2015. The new DTA is effective in Germany since 7 December 2016. It replaces the DTA of 1972. Its rules will apply from 1 January 2017 on. The DTA is meant to strengthen trade and investment between both economies by providing greater taxation certainty. The DTA also applies the OECD/G20 Base Erosion and Profit Shifting (BEPS) principles to help countering tax avoidance measures of multinational companies.

Important note: Every effort has been made to communicate the information as accurately as possible, and all pertinent subclauses of tax laws are referenced where applicable. However, please make sure to read the date of publication of this blog post in order to ascertain when it is outdated.

What is the duty payable on?

Energy duty is an excise duty regulated by federal law. In general, energy duty is charged only on the consumption of energy products (especially mineral oils, natural gas and coal) for energy purposes. The consumption of energy products for non-energy purposes is exempt from duty.

What is the duty payable on?

Import VAT is an excise duty within the meaning of the Fiscal Code and an import duty under customs law. It is imposed on the importation of goods into Germany’s domestic territory and the Austrian territories of Jungholz and Mittelberg.

Important note: There are four variants of the withholding tax currently in effect in the German taxation regime. These include withholding tax on construction, withholding tax on income of non-residents, final withholding tax, and withholding tax on income from capital. This article solely concerns itself with the withholding tax on income of non-residents. Every effort has been made to communicate the information as accurately as possible, all pertinent subclauses of tax laws are referenced where applicable. However, please make sure to read the date of publication of this blog post in order to ascertain when it is outdated.

Important note: There are four variants of the withholding tax currently in effect in the German taxation regime. These include withholding tax on construction, withholding tax on income of non-residents, final withholding tax, and withholding tax on income from capital. This article solely concerns itself with the final withholding tax.

Important note: There are four variants of the withholding tax currently in effect in the German taxation regime. These include withholding tax on construction, withholding tax on income of non-residents, final withholding tax, and withholding tax on income from capital. This article solely concerns itself with withholding tax on income from capital.

What is the concept and objectives of MiFID?

It is the acronym for "Market in Financial Instruments Directive". This Directive entered into force on 1 November 2007 and establishes a homogeneous regulatory framework in the financial markets of different countries of the European Union, which favors among other things investment in the products covered by this Directive, providing a degree of information to investors, and protecting investments across the states of Europe.

What is the tax payable on?

The income tax payable on the wages and salaries of employees is collected through deduction by employers (and is then referred to as wages tax). This deduction at source usually serves to conclude the taxation procedure, unless the employee is assessed for income tax after the end of the calendar year or unless the employer is required to carry out an annual adjustment of wages tax paid. The employer is obliged to deduct wages tax from each wage or salary payment.

What is the tax payable on?

Income tax is imposed on the income of individuals and partners in a partnership. While worldwide income is subject to taxation in the case of unlimited tax liability (see the section entitled “Who pays the tax?” below), limited tax liability means that taxation is based solely on domestic-source income within the meaning of section 49 of the Income Tax Act.

What is the tax payable on?

Under the tax system, value added tax (VAT) is classified among the taxes on income, property and transactions (with the exception of import VAT). VAT operates in the same way as a general excise duty and is chargeable in principle on all public and private consumption (i.e., goods and services purchased by final consumers). In this respect, it differs from income tax and wages tax, which take into account the individual taxpayer’s ability to pay taxes.

What are the duties payable on?

Customs duties are levies imposed on imported goods in accordance with the Common Customs Tariff.Customs duties become payable not when dutiable goods are transported across the customs border but rather when they are released for free circulation (i.e., when they are imported in the commercial sense), which requires a declaration of release for free circulation.

What is the tax payable on?

Corporation tax is a special type of income tax for legal entities (in particular incorporated businesses such as the AG, GmbH or European Company), other organized groupings of persons (such as associations) provided they are not partnerships as defined in the Income Tax Act, and conglomerations of assets (such as foundations).