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Is a coworking space a permanent establishment? All you need to know

Ist ein Coworking-Space eine Betriebsstätte?, coworking space betriebsstätte

The way we work has changed significantly in recent years. More and more people are working from home or using alternative workplaces like coworking spaces. A coworking space is an open workspace where people with different professions come together and work together. But is a coworking space a place of business? This question is important as it has implications for the tax treatment of businesses. In this article we will explore this question in detail and explain everything you need to know.

What is a permanent establishment?

Before we address the question of whether a coworking space is a permanent establishment, we need to understand what a permanent establishment is. A permanent establishment is a physical place where a company carries out business activities. This can be a branch, an office or a factory.

What is a coworking space?

A coworking space is an open workspace where people with different professions come together and work together. This space is often used by freelancers, entrepreneurs and others who need a flexible working environment. A coworking space can offer a wide range of facilities and services, such as workstations, conference rooms, internet access and kitchen areas.

Is a coworking space a place of business?

A coworking space can be considered a permanent establishment under certain circumstances. If the company uses the coworking space regularly and has a certain permanence, it can be considered a permanent business establishment. This means that the company has a certain physical presence in the coworking space and uses this space as a permanent business establishment. In this case, the coworking space can be considered a permanent establishment. However, it is important to note that each case should be considered individually and the exact circumstances play an important role in the assessment.

Durability

An important factor in determining whether a coworking space is a permanent establishment is permanence. If a company uses a coworking space regularly over a longer period of time, this can be considered a permanent presence. In this case, the coworking space can be considered a permanent establishment. However, if the coworking space is only used occasionally and there is no permanent presence, it cannot be considered a permanent establishment.

Fixed business facility

Another important factor is whether the coworking space is used as a permanent business facility. This means that the company has a specific physical presence in the coworking space and uses this space as a permanent business facility.

Do you need a business address or a workplace?

If you are looking for a workplace or business address but are unsure whether a coworking space is the right choice for you, we can help. Our company offers various options for business addresses and workspaces tailored to your needs. Feel free to contact us for more information and a no-obligation quote. We will be happy to help you and together we will find the right solution for your company. If the company has a fixed workplace in the coworking space where it regularly carries out business activities, the coworking space can be considered a permanent establishment. However, if the company does not have a fixed workplace and only carries out business activities occasionally, the coworking space cannot be considered a permanent establishment.

Effects on the tax

The question of whether a coworking space is a permanent establishment or not has implications for the tax treatment of the company. If the coworking space is considered a permanent establishment, the company is subject to the corresponding tax regulations. This means that the company is usually liable for tax in the country where the coworking space is located. However, if the coworking space is not considered a permanent establishment, the company may be subject to different tax regulations.

Frequently Asked Questions

CAN A COMPANY HAVE MORE THAN ONE PLACE OF BUSINESS?

Yes, a company can have several permanent establishments if it operates in different countries or regions.

DOES A COMPANY HAVE TO REGISTER THE COWORKING SPACE AS A PLACE OF BUSINESS?

Yes, if the coworking space is considered a permanent establishment, the company usually has to report this to the tax authorities.

WHAT OTHER TAX EFFECTS DOES THE CLASSIFICATION AS A PERMANENT ESTABLISHMENT HAVE?

If a coworking space is considered a permanent establishment, the company is usually subject to local tax regulations. This means that the company may have to pay additional taxes.

Conclusion

The question of whether a coworking space is a permanent establishment or not depends on various factors, such as the permanence and physical presence of the business. If the coworking space is considered a permanent establishment, the company is subject to the relevant tax regulations. It is important that businesses take this into account and comply with their tax obligations where applicable. Coworking spaces, despite this issue, remain a popular choice for businesses and freelancers looking for a flexible working environment.

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