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    Transfer Pricing implications draft German tax law

    This news item has been posted with thanks to our strategic alliance partner Oliver Treidler (TP&C GmbH, Berlin).

    Transfer Pricing is becoming more and more a balance between international OECD guidelines and local interpretation and additional local requirements. Furthermore, we see increased attention of tax authorities on financial transactions.

    As an example, draft tax law has been published in Germany. Our German alliance partner Oliver Treidler wrote an article on this draft tax law.

    Please find below the introduction of this article.

    “Germany’s Ministry of Finance has introduced a draft law that would have a substantial impact on day-to-day transfer pricing in Germany.

    The draft law, released 10 December 2019, amounts to over 100 pages and has already received detailed and uncharacteristically critical responses from key stakeholders, reflecting its potential impact.

    The draft proposes a wide range of changes to German tax legislation, including implementation of the EU anti-tax avoidance directive (ATAD). The most significant changes for transfer pricing relate to the so-called Außensteuergesetz, which applies the arm’s length principle in Germany (the other, non-transfer pricing, aspects of the draft are not in scope of this article).

    To be sure, some of the proposed changes to the German transfer pricing law are sensible (and overdue) as they promise a closer alignment of German transfer pricing law with the OECD transfer pricing guidelines. Other changes, however, seem bound to increase uncertainty and administrative burdens for MNEs. The devil is in the details”.

    This article was published on MNETax, for the full article please click on the link below:










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