Germany taxes its corporate residents on their worldwide income. However, most double tax treaties (DTTs) exempt income attributable to a foreign permanent establishment (PE). Non-residents with PE or property income are taxed by assessment on German-source income; those earning royalties and dividends
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Companies are subject to tax on all income and are only allowed deductions on expenses that are related to the operations of the company. According to Danish tax law, a territoriality principle prevails with respect to PEs and real estate located abroad.
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