Tax Treaty Case Law around the Globe 2024

6.1. Facts of the case

The taxpayer was a dual resident of Germany and of the United Kingdom (UK). His centre of vital interest was located in the UK. The taxpayer worked as an independent contractor for a UK company. For several years, he worked as a mechanic and provided maintenance and repair services for planes located in the hangars of a German airport. The taxpayer was subject to a security check when entering and leaving the hangar. He was allowed to store his tools and equipment on the floor of the hangar but he did not make use of this possibility. He had a wardrobe and locker at his disposal in the hangar which he used whenever he changed his clothes.

Article XI(1) of the DTC of Germany-UK 1964/70 stated that Germany may tax the income if the taxpayer has a fixed base regularly available to him in Germany for the purpose of performing his activities.

Due to his residence in Germany, the taxpayer was subject to unlimited tax liability. The tax administration wanted to tax his income related to the activity as a mechanic at the German airport as it assumed that the taxpayer had a fixed base regularly available to him. The taxpayer was of the opinion that he did not have a fixe...