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In its recent ruling dated 7 June 2023, the German Federal Fiscal Court (Bundesfinanzhof (BFH)) had the opportunity to comment on the conditions under which the provision of services by a nonresident service provider on the premises of a German service recipient leads to a fixed place of business (FPoB) permanent establishment (PE) of the service provider arising from the performance of its services (such PE is sometimes referred to as "pseudo service PE" or unechte Dienstleistungsbetriebstätte).
The court's decision is interpreted by some observers as lowering the thresholds for a FPoB PE in such circumstances. We do not necessarily agree with such observations. The BFH's reasoning may be ambiguous in parts, but in our view, there is more to suggest that the court has not departed from its previous case law. Rather, the BFH's decision seems to be owed to the particular circumstances of the individual case. The court is following the well-trodden paths of previously established case law. However, this only becomes clear at a second glance.
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