The relocation of a company abroad or the move to Germany is a complex process that can have significant tax implications. In particular, the issues of permanent establishment, de-embedding, and re-embedding play a central role here. Careful planning is essential to minimize tax risks and meet the legal requirements in both the country of origin and the destination country.

A permanent establishment is a fixed business facility through which the business activities of a company are conducted, either wholly or partially. In international tax law, the permanent establishment is of crucial importance, as it determines where a company is subject to tax. In the case of relocation abroad, it must be assessed whether a permanent establishment remains in Germany and what tax obligations arise from this. When moving to Germany, companies must ensure that they adjust their permanent establishment rules to comply with German regulations.

De-embedding describes the tax process in which assets are “de-embedded” from German taxation when a company is relocated abroad. This can lead to hidden reserves - that is, the difference between the book value and the current market value of assets - needing to be taxed in Germany, even though they have not yet been realized. The aim of de-embedding taxation is to ensure that Germany can tax these hidden reserves before they are taken out of German tax jurisdiction. Early tax planning can help minimize the tax burden in this regard.

In contrast, re-embedding becomes relevant when a company is moving to Germany. Re-embedding refers to the process in which assets entering the German tax jurisdiction are revalued to ensure that their hidden reserves are properly captured within German taxation. It is crucial to accurately assess the assets and carefully calculate the tax implications to avoid unforeseen tax burdens.

Our Services

We offer comprehensive tax advice for companies looking to relocate abroad or establish themselves in Germany. Our services include:

• We analyze the tax implications of your company’s relocation or move and develop strategies to minimize your tax burden and avoid tax risks.

• We help you understand and optimize the tax implications of de-embedding when relocating abroad and re-embedding when moving to Germany.

• We assist you in planning and adapting your permanent establishments to ensure compliance with all national and international tax obligations.

• We support you in creating the required documentation and fulfilling all tax obligations domestically and abroad so that you are always legally compliant.

Why Us?

Due to our many years of experience in international tax law and our specialization in tax advice related to the relocation and establishment of companies, we offer you tailored solutions that ensure both tax efficiency and legal certainty. We assist you in confidently managing the tax challenges of a location change and effectively optimizing your tax burden.

Contact Us

Whether you are relocating your company abroad or moving to Germany - we are here to support you with all tax-related questions. Contact us for a non-binding consultation and find out how you can benefit from our expertise in international tax law. Together, we will develop the optimal strategy for your company.