Activity clause

In German tax law, § 8 I AStG is a catalog of active and passive income. The system follows the types of income of income tax, with the exception of income from non-self-employed work and other income. To the active income i. S. d. AStG always includes income from agriculture and forestry as well as, as a rule, industrial activities, banking and insurance transactions, trade and services.
Passive income is assumed in particular for income from renting and leasing as well as income from capital assets if there is no commercially established business or participation in general economic activity. The foreign company must have a permanent place of business and must appear to the outside world.

Passive income that is subject to low taxation is subject to German additional taxation. The granting of tax benefits for foreign income in the EStG and KStG, e.g. B. Flat rate or loss compensation according to § 2 a II EStG, requires the generation of active foreign income (productivity clause). More than 90 % of foreign income must come from the manufacture / delivery of goods (except weapons), the extraction of mineral resources or from commercial services.
In den deutschen Steuerabkommen wird eine Double taxation mit der Anrechnungsmethode oder der Exemption method vermieden. Zunehmend wird die Freistellung unter Vorbehalt (Switch-over-Klausel; Subject-to-Tax-Klausel; Aktivitätsklausel) gestellt. Demnach werden ausländische Einkünfte nur dann von der deutschen Besteuerung freigestellt, wenn sie „aktiv“ i. S. d. Abkommens sind.

The tax treaties contain their own activity clauses; in some cases reference is made to Section 8 I AStG. Active income according to treaty law is always the manufacture and sale of goods and goods, banking and insurance transactions as well as technical services and consultancy. Passive income according to treaty law usually results in a method change from the exemption method to the credit method (switch-over clause).

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