“Consulting GmbH” sold consulting services in Russia and Romania, where it also had fixed places of business. The income from these permanent establishments was declared as exempt under the double tax treaties with Russia and Romania.
The tax authority, did not grant the tax relief under the exemption method. It found that German activity reservations applied to the income, due to the involvement of a person with unlimited tax liability in Germany in the activities of the PE’s.
An appeal was filed with the Administrative Court, which later ruled in favour of the tax authorities.
Judgment
The Supreme Administrative Court confirmed the decision of the Administrative Court and upheld the decision of the tax authorities.
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