|Petra Peitz-Ziemann||Erik Muscheites|
Up to now, bound in was generally considered to exclude the foreign resident who held a directorship with the German company purely to enable him to supervise its activities, or to provide a back-up in the interests of keeping the company fully competent under company law in an emergency. The fear now is that the use of the term integrated without further definition may indicate a change in attitude to the effect that a directorship is a formal appointment subject to registration and the holder is therefore automatically part of local management by virtue of the office held.
Fortunately, the ministry's other main criterion continues to be the country in which the executive physically does the work. Thus a day spent abroad on German company business – whether in the director's home office, or in his office at group headquarters – will not generally be seen as a German taxable event, regardless of its relevance to an intra-group management charge. The same would also seem to apply to days spent in third countries, such as on a visit to a major export customer of the German subsidiary. This position follows, of course, from the dependent personal services clause in most of Germany's double tax treaties.
Petra Peitz-Ziemann (email@example.com)
Tel: +49 69 9585 6586