The Reply of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China on the Identification of Permanent Organizations of Foreign Enterprises Providing Labor Services in China and the Ownership of Profits (Guo Shui Han [2006] No.694) stipulates: "Foreign enterprises do not set up offices in China, but only send their employees to provide labor services, including consulting services, in Huawei-related projects. When the actual working hours of these employees in China in any 12-month period continuously or cumulatively exceed six months, it can be considered that the foreign enterprise constitutes a permanent establishment in China. If a foreign enterprise constitutes a permanent establishment by providing services for a project within the territory of China through its employees, its profits from the domestic services of the relevant project shall be regarded as the profits of the permanent establishment. "
According to the above, although the foreign company has not set up an office in China, but its employees have provided management consulting services in China for five years, it can be judged that the German company constitutes a permanent establishment in China, which should declare and pay enterprise income tax on its own. Your unit shall report to the competent tax authorities and assist the permanent establishment in handling relevant tax matters.