Katharine Butler

1 week ago | news.bloomberglaw.com | Katharine Butler |Jessica Estepa

Germany’s Federal Fiscal Court has significantly restricted the conditions in which German tax authorities can allocate profits to permanent establishments of foreign companies in Germany. This marks a clear shift in how multinational enterprises operating in Germany through PEs—especially in service-heavy, low-margin industries—may be taxed. The court has affirmed that taxation must be grounded in actual business outcomes, not assumptions about functional roles or routine service profiles.