Stellungnahme/Eingabe

2013

Stellungnahme der Bundessteuerberaterkammer an die OECD/CTPA - Tax Treaties, Transfer Pricing and Financial Transactions Division

31.01.2013



Dear Madam or Sir,

Please find in the following our general remarks regarding the above mentioned consultation. The Federal Chamber of Tax Advisers represents the interests of more than 88.000 tax advisers in Germany vis-à-vis the Bundestag, the Bundesrat, the federal ministries, the top echelons of the civil service, the courts and the „institutions of the EU and OECD”. The Federal Chamber of Tax Advisers supports every measure to prevent double taxation and a just distribution of profits between the different countries. Our tax experts, professor Lüdicke and professor Schmidt, took part in the public consultation meeting which was held on 7. September 2012 in Paris. In addition to our former comments we wish to add some general remarks.

  1. We support every measure to modernize the definition of „Permanent Establishment”in order to match the necessities of modern economy, for instance in the IT-environment.
     
  2. As already mentioned in our statements before, we’d like to strengthen the following
    point:

    The German Federal Chamber of Certified Tax Advisers as well as German industry appreciates every effort restricting the expansion of the PE, because for businesses and their advisers it is of utmost importance to know in advance of whether or not a specific activity in another state constitutes a Permanent Establishment. This is true not only in respect of administrative obligations regarding the taxation of the Permanent Establishment itself, but also- and sometimes more importantly – with respect to administrative obligations regarding the enterprise’s employees as well as their material tax position.
     
  3. Referring to our letter from 25. September 2012 and as already mentioned by our delegate professor Lüdicke during the meeting in Paris, it would be very helpful to clarify of whether or not the presence of the painter in his clients’ office building where he spends, for two years, three days a week constitutes a Permanent Establishment only because „he is performing the most important functions of his business (i.e. painting)”. The referral to the relatively most important functions of the painter’s business suggests that this criterion is decisive for the assertion of a Permanent Establishment. Hence, the example should be of no importance to larger enterprises with many clients at the same time; even if one of the employed painters would spend more than half of his working time, over two years, in the building of one client that would not represent the most important functions of the business of the enterprise.

    Therefore we’d like to repeat our question: Does this mean, may be in accordance with the example in Paragraph 6.2. („catering”), that the Painter example would be applicable only for sole proprietors?
     
  4. Some differentiations/examples may be a little bit confusing, for instance regarding „Recurring activities” in Paragraph 6.1.

While the decision if a PE does exist or not is very important for the businesses and their tax advisers, it is still unclear at which point recurrent activities constitute a PE, thus may lead to double taxation.


Yours faithfully,

Jörg Schwenker
Geschäftsführer

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