Tax Law and Tax Consulting

We provide companies and entrepreneurs with comprehensive tax consulting that combines ongoing obligations with strategic structuring and legally secure representation. The focus is on facts that have tax implications in both countries.

Where two states want to tax

As soon as a company operates in Germany and Turkey, the same question arises: Which state is allowed to tax which profit? The double taxation agreement between both countries allocates the taxing rights and limits the withholding tax on dividends, interest, and royalties. Anyone wishing to invoke this must prove the requirements — residence certificate, economic entitlement, appropriate allocation of income.

The most common point of contention is the permanent establishment. A sales representative with signing authority, a fixed place of business, a construction site beyond the duration threshold — each of these configurations can establish taxing rights in the other state without anyone having formed a company. We examine such facts before they arise in a tax audit.

Transfer Pricing

Services between affiliated companies must be billed at conditions that independent third parties would have agreed upon. The company bears the burden of proof for the appropriateness, and the General Tax Code (AO) requires documentation to be provided upon request within a short period. If it is missing or unusable, the tax authorities may estimate — and impose surcharges.

We create and maintain this documentation, review existing transfer pricing systems for their robustness, and accompany adjustments when functions or risks shift between the companies.

Typical Configurations

The management fee. The Turkish parent company charges the German subsidiary for management services. Whether the deduction for business expenses holds depends on three points: Is there a written agreement? Is the service actually rendered and beneficial for the subsidiary? Is the distribution key comprehensible?

The shareholder loan. The interest rate, collateral, and repayment terms must withstand what a bank would have required. Otherwise, there is a risk of reclassification into a hidden contribution — with consequences on both sides of the border.

The relocation. If a shareholder with significant participation relocates their residence abroad, exit taxation applies: Hidden reserves are taxed without any money having flowed. Those who know this in time can plan; those who find out later can usually only defer.

Ongoing Obligations

Bookkeeping, annual financial statements, VAT advance returns, wage tax — we take over ongoing tax support and pay attention to the interfaces that can easily be overlooked in day-to-day business. Cross-border services regularly lead to the transfer of tax liability to the recipient; anyone who misrepresents this in the invoice risks their client's input tax deduction.

In the case of goods deliveries between Germany and Turkey, it should be noted that Turkey is not part of the VAT area of the Union. An intra-community delivery becomes an export with its own proof obligations — and in the destination country, an import with Turkish VAT and customs duties.

Incentives and Special Regimes

Turkey promotes investments through a tiered system of tax reductions, exemptions, and regional benefits; which level applies depends on the industry, location, and investment volume. In Germany, instruments such as the research grant are also available. Both are subject to formal requirements and application deadlines — those who only inquire after the investment has begun often lose their entitlement.

We assess early which incentives are available and align them with the tax structure. A benefit that applies in the destination country but is offset by reallocation in the country of residence is not a benefit.

When the Tax Authorities Audit

In the tax audit, it is determined what remains of a structuring. We accompany audits from the order to the final discussion, conduct correspondence, and determine which documents are to be submitted when. If a position remains disputed, we conduct the objection procedure and represent before the tax court.

Where a tax audit transitions into a tax criminal procedure, the rules change: The obligation to cooperate becomes a right to silence. Recognizing this transition before it occurs is one of the most delicate tasks of audit support.

Related to this Consulting

Tax questions rarely arise in isolation. We align them with the corporate law structure, examine the tax implications of the acquisition path in transactions, and work closely with criminal defense in cases of tax evasion allegations.