Offshore Wind-Parks: Trade Tax Structuring

● By Dr. Falko Tappen, Attorney-at-Law / Certified Tax Advisor, DLA Piper ● A trade tax liability can only arise if a permanent establishment is maintained in "inland" Germany. Thus, when it comes to offshore wind parks, in the past it was not free from doubt, whether the continental shelf administrated by Germany qualifies as "inland" within the meaning of Sec. 2 German Trade Tax Act (Gewerbesteuer "GewStG"). Therefore, by an act dated 20.12.2007, the legislator clarified, that the said continental shelf is also a part of the "inland" for trade tax purposes, Sec. 2 para. 7 no. 1 GewStG. Trade tax is calculated on the basis of the taxable profits determined on the basis of the (corporate) income tax act plus certain add-back, minus certain deductions. The trade tax rate is calculated by multiplying 3.5% with the applicable trade tax multiplier. The latter is determined by the competent municipality. When it comes to off-shore areas, there is - obviously - no directly competent municipality. Therefore, the Federal States being closest to the relevant area (Niedersachsen and Schleswig-Holstein) have determined the applicable trade tax multiplier. Schleswig-Holstein has appointed the island Helgoland with levying trade tax (multiplier of 350 %) whereas Niedersachsen levies the trade tax itself and has determined an multiplier of 421 %. In practice, investors often acquire a plant by way of a share deal. Since a number of plants are operated by a GmbH & Co. KG, i.e. a limited partnership with a limited company as general partner, the acquisition is effectively comparable to an asset deal. A pure asset deal is generally not feasible, as the operating entity has entered into a number of contracts, which have to be continued (burdensome in an asset deal). The interesting part is, what happens if the general partner leading the business affairs of the partnership is established in a different municipality than the plant itself ...Zum vollständigen Artikel

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