In two decisions, the Supreme Tax Court has defined in more detail the requirements for a foreign permanent establishment in cross-border situations under a double tax treaty (DTT). If such a treaty exists, double taxation is usually avoided by exempting the foreign branch income from German tax.
Background
In the case I R 47/21, a cab operator (plaintiff) living in Germany had access to a Swiss taxicab service center's office in Switzerland due to his membership. That office was equipped with three workstations and was available for three taxi operators. The plaintiff used the office (including a lockable stationary container) for business management duties as well as for personnel administration of his employed cab drivers, preparation of current bookkeeping, accounting, financial control and monitoring compliance with regulatory obligations.
