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Invitation to file a tax return in Germany - Erinnerung / Prüfung der Steuerpflicht

25th Sep 2022

Are you doing business in Germany and have you received a notice from the German tax authorities entitled "Erinnerung or Prüfung der Steuerpflicht"?

The tax office sends the Erinnerung notice automatically to all business entities (sole proprietorships, limited liability companies) that are registered with the relevant tax office in Germany, have been assigned a tax number or Steuernummer and have not filed a tax return by the deadline of 31 July.

It is possible to respond to the notice either by appealing or by filing a tax return. In any case, do not underestimate the challenge by ignoring it. How do you know whether to file an appeal or a German tax return? You are obliged to file a tax return if you have a permanent establishment in Germany. Otherwise, an appeal is in order.

Permanent establishment = Tax return

"Permanent establishment ": It is defined under the Double Taxation Treaty between the Slovak Republic and Germany in Article 5(1) and (2) as follows:

The term "permanent establishment" means, within the meaning of this Treaty, a permanent establishment for business in which an enterprise carries on its business wholly or partly. The term 'permanent establishment' shall include, inter alia, a building site or an assembly site lasting more than 12 months.

What does this mean in practice?

If you have worked at one location (e.g. one construction site) in Germany for 12 consecutive months, or within a radius of 50 km as the crow flies, a permanent establishment arises at that location. If you are in Germany for more than 12 consecutive months, you have an economically permanent establishment in Germany.

How do I find out whether a permanent establishment has been established in Germany?

The solution is simple. Make a list of your construction sites, taking into account the different years you worked on the site in Germany. For example, if you started working on a construction site in 2019 and continued to work on the same site in 2020 and 2021, fill in the summary for all the years listed, i.e. 2019, 2020 and 2021.

Don't forget the deadline set by the German tax office in the notice you received!

We will be happy to help you not only with filing your tax return, but also with obtaining the necessary documents, with creating a construction overview, with the tax refund or with the appeal.

All our services for Germany can be found on our website.

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