The tax assessment is based on the real facts, not marketing terms. A contract labelled 'business address' or 'virtual office' is only one piece of evidence.
The statutory framework
Section 12 of the German Fiscal Code defines a permanent establishment as a fixed place of business that serves the activity of an enterprise. The place where key management decisions are actually made can be separately relevant under the Fiscal Code.
Control and availability of premises
Authorities can examine whether the company has more than occasional visitor access, what facilities are available, and whether the premises can genuinely support the activity claimed.
Where management decisions are made
For management-focused companies, evidence may include meeting records, calendars, correspondence, document access and the real location of important decisions.
Consistency across records
Commercial-register records, local business registration, tax filings, invoices, website disclosures and actual operations should tell a consistent story. Contradictions create avoidable risk.
No automatic recognition
A provider can supply facilities and records but cannot control an authority's assessment. Company-specific professional advice and truthful implementation remain essential.