Persons who independently and in a continued manner, i.e. for an extended duration, participate in commercial trading with the intention of making profits are deemed to be engaged in a commercial enterprise. Agriculture, forestry and freelance activities are excepted.
We offer advisory services for all types of companies:
- Sole proprietorship
- GmbH (German limited company)
- OHG (general partnership)
- GbR (partnership under civil law)
- Limited (UK Ltd)
- KG (limited partnership)
Choosing the right legal form for an enterprise is extremely important, not least because it is a decisive factor in how a company will be taxed. After deciding which type of entity presents the optimal legal form for the company, it is important to regularly review this initial decision, for as a company develops its requirements may change and it may thus be better served by a different legal form. We also provide comprehensive advice on changing legal form.
Freelance activities comprise independently performed scientific, artistic literary, teaching or educational activity; the independent professional activities of
»doctors, dentists, veterinary surgeons, lawyers, notaries public, patent lawyers, land surveyors, engineers, architects, industrial chemists, accountants, tax advisors, economic advisors and management consultants, sworn auditors, authorised tax representatives, therapists, dentists, physiotherapists, journalists, press photographers, interpreters, translators, navigators.
and similar professions.«
A freelancer as defined in §18 sentence 1 and 2 EStG is similarly deemed to be performing a freelance activity when he or she employs the assistance of another skilled professional, on the condition that he or she works in a leading and autonomous capacity due to his or her own specialist knowledge.
In a surprisingly short time, Germany has developed into a desirable investment market for foreign investors. It started with the acquisition of commercial properties: retail outlets and logistics facilities and the purchase of residential property from municipal housing companies. Foreign investment has now spread to all market segments.
The return on real estate remains significantly above the interest rate. The prospects of an economic recovery offer an additional incentive for profitable investment in Germany.
We also advise international investors in this area of investment in Germany. We aim to find the optimal structure for your investment, according to your expectations. In this branch, we are working closely with house managements, real estate brokers, specialised lawyers, architects and banks in order to offer you all services under one roof. We currently advise around 300 clients representing various types of companie.
On Corporation Tax
As corporate bodies in civil law, clubs are subject to corporation tax.
However, all clubs with non-profit status are exempt.
On Business Tax
Non-profit clubs are equally exempt from the business tax.
Clubs engaged in commercial activity are only conditionally exempt from business tax. Exemption is granted according to particular criteria and income limits. A distinction is made between:
- tax-exempt non-material area
- tax-exempt asset administration
- tax-privileged objective-related business operations
- taxable profit-making business operations
Income liable to taxation is exclusively limited to income from commercial business activities. Gifts, donations, public subsidies are exempt. Rental income and leases are not subject to taxation, insofar as they fall under the heading of asset administration.
Value-added tax: the non-material area is tax-exempt, while asset management and objective-related business operations are taxed at the reduced rate of 7%.
Profit-making business operations which are not undertaken solely to pursue the organisation’s goals are taxed at the regular rate of 19%. Donations to charitable bodies are tax-deductible under certain conditions.
We will gladly assist in the establishment and tax structuring of charitable bodies.
This also includes changes from and to non-profit status.