StartTax lawInternational Tax Law

LHP Lawyers Tax Advisers in Cologne provide advice on international tax law

In our largely globalised world, business and private border-crossing investments across national frontiers are quite normal. The removal of customs barriers and the creation of free trade zones (in spite of the current counter-movement of the US administration) and the progress of networking make our world smaller and smaller. Distances become, in effect, shorter and shorter and capital and investments flow faster than ever before - regardless of national borders or national tax laws.


National tax legislation in Germany v. global exchange of goods and services

For many years, the following -frequently quoted - sentence has applied: "Business goes global, taxes stay local". It has to be noted that while tax laws are also increasingly based on international situations - however, the national perspective is always preserved. This will not change in future because tax legislation is enacted by the national states, at least, in the case of income taxes (e.g. income tax and corporation tax). This means that, today, as well as in future, the various legal systems of the national states will have to be observed in international matters.

What is the role of international tax law in Germany and in a globalised world?

In a globalised world, international tax law is of outstanding importance. In a globalised world, the national states, of course, wish to prevent the national tax substrate from evaporating "into thin air". This does not only concern multinational groups. It starts with small things, such as private investments, e.g., in a foreign (holiday) home or the acquisition of international shareholdings in the form of funds or shares. Therefore, it is of the utmost importance that both private and entrepreneurial decisions are examined against the backdrop of international tax law.

What can be expected when receiving advice in international tax law?

Advice in international tax law by experienced lawyers specialising in tax law and experts in international tax law should help our clients in, at least, three respects.

  1. Existing national - i.e. German - and international risks have to be identified with the help of the submitted international matter.
  2.  The risks have to be analysed, assessed and weighted in order to develop suitable and secure design options. 
  3. These options should aim to keep the tax burden as low as possible and to ensure planning reliability and consistency for our clients at the same time.

What are your risks in international tax matters?

It is obvious that the focus in international tax matters is on avoiding the threat of double taxation and keeping the total tax burden as low as possible. Risks arise whenever the parties concerned in international tax matters do not receive appropriate advice or do not receive this advice in due time. In many cases, there is a lack of awareness of possible situations which might trigger liability to very significant tax amounts without any business reason and even without the acquisition or sale of assets. The notional disclosure of hidden reserves in the case of relocations of companies or the mere relocation of one shareholder can jeopardise the companies and lead to insolvencies. In this context, there are also material liability risks for the current tax adviser if he/she does not recognise existing tax risks at the appropriate time. On the other hand, the current tax adviser can only recognise these risks if he or she is informed of international and border-crossing matters by his clients early on - if possible as early as during the initial planning phase.

International tax law and international inheritance law in inheritance and gift cases

Moreover, in a globalised world, cross-border inheritance and gift arrangements are also increasing - leading to the same challenges, i.e. the need for the creation of a secure legal framework and, if possible, a tax-optimal solution. As early as during succession planning, a lawyer specialising in international tax law and international inheritance law as well as a tax lawyer and an expert adviser on international tax law should always be called in. For example, the European regulation on matters of succession gives testators extensive scope in selecting the legal framework in the context of their testamentary freedom. The question of how and in which form the European regulation on matters of succession and other international legal systems can be used in order to minimise the tax burden for heirs and beneficiaries can be answered by our tax lawyers specialising in international tax law and international inheritance law and by our international tax law advisers.

International tax law and financial policy

In international tax law, the focus is increasingly no longer "just" on avoiding potential double taxation or the minimisation of the individual's overall tax burden. International tax law increasingly assumes the important role of creating an international framework for fair competition. While, years ago, the huge warehouses with several thousand employees were not business establishments within the meaning of the double taxation agreements and, therefore, they were non-existent in terms of income tax, the international community has now responded to this. As a result, large international corporations have gained a significant competitive edge by "designing" their tax rate lowering it by up to 20% compared with companies operating nationally. Now, anyone who can offer his products and services at a 20% lower price than the national competitors because of a tax advantage will potentially become a monopolist at some point. Therefore, the right tax structure is also essential for preserving and strengthening a company's own competitive strength.

Special advice for companies and private persons in international tax law by tax law experts, tax adviser and international tax law expert advisers

As tax law lawyers specialising in international tax law and tax advisers (expert advisers in international tax law), LHP Lawyers Tax Advisers help to prevent uncongenial tax surprises. In our day-to-day work, we support German companies and private persons in so-called outbound cases in planning and the tax optimisation of their international activities and restructuring, in investments and expansions of the business activities abroad. In the case of so-called inbound cases, we help foreign companies and private individuals in the tax optimisation of their activities on the German market.

Private individuals can benefit from tax advice in international tax law when planning to move abroad, with regard to international inheritance and gift matters as well as the design and consideration of foreign income as well as regards reporting national income by taxpayers subject to a limited tax liability in Germany.

In many cases, domestic tax obligations are overlooked when designing foreign relationships - so that there can be (unintentional) tax reductions or even actual tax evasion. In this respect, experienced lawyers and tax law experts can help to avoid criminal proceedings through subsequent tax declarations and voluntary self-disclosure (please add link to voluntary self-disclosure) of foreign income.

LHP Lawyers and tax advisers - our services

LHP Lawyers Tax Advisers and Experts in International Tax Law offer competent and individual advice, in particular, with regard to the following main subjects:

  • Relocation of private residences
  • Departure taxes
  • Double taxation agreement: Taxation rights and avoidance of double taxation
  • Relocation of companies
  • International restructuring
  • Ongoing tax advice and support for foreign companies with tax connections in Germany
  • Supporting foreign activities of German companies
  • Preparation of income tax returns with national and international income
  • Advice of non-resident taxpayers with national income (limited tax liability)
  • Structuring advice of national taxpayers with foreign income
  • Voluntary self-disclosure and subsequent declaration of foreign income
  • International succession planning
  • International gifts and inheritances
  • Obtaining legal certainty for international matters by way of a legally binding statement

LHP Lawyers Tax Advisers have worked for companies and private individuals with regard to questions of international tax law for more two decades. Because of our international network, we can call in colleagues in the respective country concerned or, in addition, ensure that they support you.

With our services, we support you in planning and implementing your project and in resolving possible conflicts with the fiscal authorities. The tax advisers and specialist advisers for international tax law can support you by preparing expert reports, showing possible solutions, preparing individual check lists, supporting your projects and preparing binding statements.

Of course, our tax advisers and experts in international tax law also provide individual advice in English.

LHP: Attorneys at Law, Tax Law Specialists, Tax Advisers PartmbB

Cologne

Theodor-Heuss-Ring 14, 50668 Cologne,
Telephone: +49 221 39 09 770

Zurich

Stockerstrasse 34, 8002 Zurich,
Telephone: +41 44 212 3535