Tax liability as Company
I am the director/employee of aa UK ltd company together with my spouse as equal partners. I have secured a contract with a Russian entity, that requires that i am providing services based in Germany. I invoice the Russian client directly. I wish to understand my tax obligations/hierarchy of DTT's and German tax liability.
1. Is my Limited company liable for corporate tax in Germany.
2.Should i create a permanent establishment (PE) in Germany as an employee of the UK ltd company (i.e. a subsidiary). Do i become a permanent representative of this PE. Then profit generated by the PE ( which is an offshoot of the UK ltd) becomes liable for corporate tax in Germany.
3.The subject of PE according to German Fiscal Code(AO), section 12, and permanent representative. section 13 would become appropriate under the consideration of 2 above.
4. According to DTT business profits are generally taxable in the state where the company is resident (in this case UK), unless a PE in the meaning of Art 5 of DTT is given in the other state (i,e, Germany). However, i believe the term PE is the meaning of Art 5 deviates from the PE in the meaning of sect 12 of German Fiscal code.
Tax Liability as an Individual
1.In case of double residency Art 4 para 2a of the DTT UK-Germany states that the individual shall be deemed to be a resident only of the contracting state with which his personal and economic relations are closer. This would be UK, since i have a home, and family there.
2. However Art.14 of the DTT, income from employment exercised in Germany is generally taxable in Germany
Essentially i would like to know
1. Can I still maintain my Ltd UK company and pay all my taxes in UK. Despite receiving no income directly from within Germany, or must i set up a PE as an extension to my UK tld Co.
2.Must i pay tax on income i receive via my UK ltd in Germany.
3. What is the best option in terms of tax optimisation