Changes to German transfer pricing regulations affect PEs
01 May 2012
The German Ministry of Finance published a draft Bill of the Annual Tax Act for 2013. The publication, dated March 5 2012, will implement several EU as well as OECD regulations into the German Tax Law. Oliver Wehnert and Ivo Tankov of Ernst & Young explain what these changes mean for taxpayers and their transfer pricing operations.
The German Ministry of Finance's (GMF) proposed changes
present a number of implications for taxpayers. They
specifically focus on: implementing EU directives, which allow
for greater cooperation between tax administrations operating
in different jurisdictions; introducing changes to transfer
pricing legislation, which will now be more in line with the
2010 OECD Model Tax Convention (MTC) as well as the 2010 Report
on the Attribution of Profits to Permanent Establishments (the
Report); and amending the VAT Act so that it now includes new
regulations on the location of services being rendered as well
as the new requirements for official invoices.
Underlying OECD concepts utilised in the draft legislature
Authorised OECD approach in terms of Article 7 of the MTC and
the Report The proposed Annual Tax Act has introduced some
specific amendments to Article 1 Foreign Tax Act (FTA), which,
among other topics, also covers permanent establishments (PE).
The amendments proposed...
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