Germany: Beware of the 12-month deadline for constructions (permanent establishment)
Are you implementing a project in Germany that lasts longer than a year? Exceeding 12 months fundamentally changes your tax and accounting obligations.
If the construction lasts longer than 12 consecutive months, you will have a so-called permanent establishment in Germany. This period also includes the time your subcontractors are active.
What does this mean for you?
- German accounting: Obligation to keep accounts according to German regulations.
- Taxation in Germany: Profits from the project are taxed according to German standards.
- Change of authority: The local jurisdiction of the tax office is now determined by the location of the construction (no longer centrally in Chemnitz).
Our tip: Monitor the duration of projects in advance. We will help you assess the situation and with the administration related to the German tax regime.
Do you need to assess your situation in Germany?
Contact our specialists