Germany approves stricter business transfer tax rules

Germany is further tightening transfer pricing rules for cross-border transfers of business activity, according to a Federal Finance Ministry decree approved by the Bundesrat on Friday.

According to the regulation, a partial transfer of a business activity or function will be considered the same as a transfer of the entire activity, and measures such as the capitalization period of the use-limiting period will need to be stated.

  • The decree completes a 2021 law that brings Germany’s provisions on the arm’s length principle – a transfer pricing valuation method for transactions between related entities – in line with the latest OECD guidelines…

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