In a decision published today, the Supreme Tax Court held that Section 1 (5) Foreign Tax Act does not constitute an independent rule for determining permanent establishment profits. General allocation methods such as the cost-plus method require a clear legal basis - otherwise they are inadmissible.
The Supreme Tax Court has held that a foreign business with a registered German branch cannot file a regular VAT return if it has no German turnover. Rather, it should recover its input tax as a foreign business undertaking.
