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The Federal Fiscal Court of Germany (BFH) has ruled that hotels, parking garages, and other lodging businesses are classified as harmful administrative assets under inheritance tax law. This decision has significant implications for entrepreneurs wishing to pass down such businesses to heirs while benefiting from inheritance tax privileges.

A permanent establishment for construction and assembly activities in Germany is typically defined under Article 5 of applicable Double Taxation Agreements (DTA) and the German tax code (§ 12 AO – Abgabenordnung).

When foreign companies engage in business activities in Germany, it is crucial to understand when these activities constitute a Permanent Establishment (PE) under the applicable Double Taxation Agreements (DTAs). Recognizing the formation of a PE is essential, as it triggers specific tax obligations and compliance requirements.
This article provides an overview of the criteria for establishing a PE in Germany, with examples from various DTAs, and outlines the associated responsibilities for foreign enterprises.

When transferring real estate in Germany through inheritance or gifts, determining the property’s value is a critical step for calculating inheritance tax (Erbschaftsteuer) or gift tax (Schenkungsteuer). The valuation process is regulated by the German Valuation Act (Bewertungsgesetz, BewG), specifically §§ 157–198 BewG, and ensures a fair market value is determined for tax purposes.

Family foundations (Familienstiftungen) play a unique role in estate planning and tax optimization in Germany. These legal entities are used to manage family assets, provide financial security to family members, and achieve specific long-term goals. They can offer advantages in inheritance tax planning and even help avoid certain taxes, such as the exit tax (Wegzugsteuer). However, they also come with specific obligations and limitations.

When structuring and executing seed funding rounds, careful attention must be given to both legal and tax frameworks. These considerations are crucial for protecting both investors and startup founders, ensuring regulatory compliance, and optimizing financial efficiency.

Foreign investors play an increasingly significant role in the financing landscape of German startups. International interest brings opportunities, but it also introduces complex regulatory, tax, and legal challenges, especially in the seed funding stage. This article provides an overview of the legal and tax considerations for foreign investors entering the German startup ecosystem and how WW+KN, a Baker Tilly Company, with extensive experience in inbound cases, assists in navigating these complexities.

As startups approach their first significant financing round, typically in the form of a seed funding round, many rely on their existing advisors for guidance. However, standard accounting and legal practices may fall short in addressing the complex requirements of a seed round. In these situations, the expertise of specialized firms becomes essential, as they offer a deeper understanding of the legal, tax, and financial nuances that such funding rounds demand. This article outlines why startups benefit from turning to specialized, multidisciplinary firms like Baker Tilly, where tax advisors and attorneys work closely to support all aspects of a seed round.

At WW+KN, a Baker Tilly Company, we specialize in providing comprehensive financial services for hotels operated in Germany with international investors. Our experience in this sector enables us to deliver tailored solutions that meet the unique needs of global businesses operating within the German market.