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.

You can respond to the notice either by appealing or 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? There are a few cases where you need to file a tax return, which we covered in I worked in Germany. Am I obliged to file a tax return? One reason is the establishment of a permanent establishment in Germany, in which case you must always file a return.

Permanent establishment = Tax return

A permanent establishment is defined in Article 5 (1) and (2) of the Double Taxation Treaty between the Czech Republic* and Germany as follows:

For the purposes of this Agreement, the term "permanent establishment" means a permanent business establishment in which an enterprise carries on its business in whole or in part. The term 'permanent establishment' includes, but is not limited to, a construction or assembly site which lasts for more than 12 months.

*You can find current double taxation agreements between Germany and individual countries on the websites of the tax authorities or ministries of finance.

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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