International Tax Law

Where two or more tax systems meet.

Most tax questions resolve within a single jurisdiction. The ones that do not — where a treaty governs, where two sets of rules make contradictory demands, where a choice in one country triggers a consequence in another — are the matters that define this practice.

Treaty Application & Tie-Breaker Rules

Treaty analysis is the backbone. Every cross-border question begins with the same sequence: which article of the relevant double-taxation agreement applies, how the two contracting states interpret it, and whether the German position, the foreign position, and the treaty text can be reconciled. When they cannot, the question becomes how to structure the situation so that they can.

Beyond treaty interpretation, the substantive areas we work in most often include exit taxation under § 6 AStG — the realisation of hidden reserves on the transfer of a substantial shareholding out of German unlimited tax liability, whether to a treaty state or beyond. These cases are rarely straightforward: the valuation question, the timing question, and the deferral mechanics under the post-ATAD regime each require separate analysis.

Foreign Trust Structures in Germany

US Trust structures form a second recurring category. For beneficiaries resident in Germany, the German qualification of the trust — transparent, intransparent, or hybrid — determines the entire tax treatment, both annual and on distribution. The analysis is not optional; the default treatment is almost always the worst available outcome.

PFIC and FATCA are the two regimes that make US citizenship tax-expensive in Germany. Non-US mutual funds, German insurance wrappers, and most UCITS ETFs are classified as Passive Foreign Investment Companies. FATCA compliance is a running obligation, not a one-time exercise, and must be coordinated with the German filing rather than handled in isolation.

Cross-border pensions and social-security coordination form an increasingly material part of the practice, and are the subject of ongoing academic work by the firm. Statutory pensions from the United States, Switzerland, the Netherlands, France, Turkey, and Israel each receive distinct treaty treatment. The wrong classification can cost tens of percentage points over a lifetime of drawdown.

Cross-Border Inheritance & Gift Tax

Inheritance and gift tax across jurisdictions completes the core profile. Where the deceased, the heir, and the assets sit in three different tax systems, the relevant treaties (where they exist) and the unilateral credit rules (where they do not) must be reconciled with care — and often well before the event itself.

Typical Situations

Scenario 1 — US Trust with German beneficiary.

A US-German couple resident in Munich inherits a brokerage account from a deceased parent in California. The account contains PFICs, the trust that held it is partially transparent for German purposes, and the step-up in basis available under US law has no German equivalent. We structure the liquidation sequence, the reporting on both sides, and the timing to minimise double taxation.

Scenario 2 — Exit taxation on relocation.

A German entrepreneur with a 40 % shareholding in a GmbH is relocating to the United Arab Emirates. § 6 AStG applies. The valuation methodology, the deferral election, and the interaction with the UAE’s non-treaty status require coordinated planning months before the move.

Scenario 3 — UK bare trust with German beneficiary.

A British national resident in Germany is the beneficiary of a UK bare trust holding a family property in Yorkshire. Under § 39 AO the economic-ownership analysis determines whether the trust is transparent for German income-tax purposes — a question with material consequences for rental income, for the § 23 EStG speculation period, and for the eventual disposal.

How We Work

Every international mandate begins with a structured inventory: which jurisdictions are involved, which treaty or treaties govern, which facts are settled, which are not, and where the genuine decisions lie. Only then does drafting begin. The output is always written, always defensible in both tax administrations, and always delivered on a fixed fee agreed in advance.

Where a second jurisdiction requires local representation — a US CPA, a UK chartered tax adviser, a Swiss Treuhänder — we coordinate through established colleagues rather than improvise. The practice exists to hold the German end of these matters to a standard the foreign adviser can rely on.

International tax matters reward early conversation. A 15-minute call, confidential and without obligation, is usually enough to identify whether the practice is the right fit — and what the realistic shape of an engagement would look like.