Permanent establishment for income tax purposes
In German income tax law, the term permanent establishment is defined in Section 12 AO. “According to this, a permanent establishment is any fixed place of business or plant that serves the activities of a company.” As the definition is vague, the legislator has named a number of examples in the law that are to […]
German Chartered Accountants vs. pure German Certified Tax Adivisors
Auditors have a lot of experience and many years of training. It is often the better and longer training and the additional examination passed with in-depth legal and business knowledge and the therefore usually better quality of the work that prompts clients to appoint an auditor instead of a tax consultant. In addition, the greater […]
Transfer pricing methods
In Germany, the following transfer pricing methods are recognized by the tax authorities: Price comparison method Resale price method Cost-plus method Profit split method Transaction-based net margin method (TNMM) This might also interest you: Definition of the transfer price Transfer pricing documentation Are you looking for a tax consultant on this topic? Find out what […]
Transfer Pricing Documentation – Who Must Draw It Up?
If a German company or a German permanent establishment is involved and the cross-border services exceed a value of €600,000 p.a. or the deliveries exceed a value of €6 million p.a., transfer pricing documentation that complies with the strict and detailed German regulations must be submitted within 30 days of a tax audit order being […]
Transfer price – What is that?
The transfer price is the price charged between different areas of a company or between different companies within a group for goods and services exchanged within the company (e.g. goods deliveries, licenses, loans, provision of employees). It plays a major role in tax law, as it can be used to shift profits to lower-taxed regions […]
VAT Mistakes – What can happen?
Mistakes in sales tax – what can happen? VAT law has developed into an extremely complicated subject. Although there is harmonization at EU level, the national regulations of individual countries differ greatly in some cases. Mistakes are inevitable, but ignorance is no defense against punishment. Small mistakes can quickly become very expensive, especially when it […]
Company valuation: Methods
The most common methods for valuing companies are Simplified income capitalization approach Multiplier method IDW S1 method (capitalized earnings value method or DCF method) The simplified income capitalization approach in accordance with §§ 199 ff. BewG focuses on the determination of tax bases for inheritance and gift tax purposes. It is a past-oriented valuation method […]
VAT – 11 most common mistakes
Taken from real life: the 11 most common VAT mistakes. From experience, we can say that the following problems, among others, can occur with VAT: Uncertainties as to whether or not VAT should be shown on outgoing invoices No differentiation between private customers and companies when invoicing abroad Formal errors, parts of the necessary invoice […]
Tax Compliance Management Systems
What is a tax CMS? A compliance management system (CMS) refers to the principles and measures introduced by a company on the basis of the objectives defined by the legal representatives, which are aimed at ensuring that the legal representatives and employees of the company and, if applicable, third parties, act in accordance with the […]
Tax evasion – When does it reach the statute of limitation?
Tax evasion is generally time-barred after 10 years, reckless tax evasion (i.e. without intent) after 5 years. However, the limitation period only begins at the end of the year in which a tax return was submitted. If no tax return has been submitted, the limitation period only begins after 3 years, i.e. the tax office […]
