Administrative recourse. Transfer pricing adjustments are typical of tax control. Depending on the size of the company, all exercises are reviewed. Tax control is a standard procedure that takes place every three or four years. The review concludes with a final discussion between the tax authorities and the subject; in most cases, agreement is reached on the changes proposed by the tax authorities. The results of the audit are grouped into an audit report that is the basis for the review of the tax decision. Under S. 90, paragraph 3, the General Tax Code (Tax Code) and GAufzV (BStBl I, 2003, p. 2296), the subject is required to collect, as far as possible, comparable internal and public data in support of the transfer pricing method applied. In particular, the taxpayer must document comparable data from his own third-party operations, such as. B that pricing, general terms of sale, cost rate, profit margin, cross margin and net margin.

This is relevant to the transfer pricing review resulting from the resale price method or the cost-plus method. In addition, these comparisons are relevant to cost-sharing and interest rate or royalty arrangements. In cases where the taxpayer has benefited from an APA abroad, the German tax authorities are not required by such a unilateral APA. In addition, the German tax authorities could examine the taxpayer because it is considered that the taxpayer has entered into an agreement with a foreign country to the detriment of Germany. In the case of other CCMs, particularly in the area of research and development D, contributions to the CCA cannot be determined on a purely economic basis, but require that each contribution be assessed on the basis of the principle of arm length. While this approach is theoretically clear, the taxpayer remains uncertain, particularly with respect to CCAs, which have functions, material or intangible values that may be difficult to assess. We therefore expect a high risk that each tax authority involved in a CCA will pay for high-quality contributions from CCA participants, as these contributions, as well as the benefits of participants, are essential in determining the compensation to be received from other participants under a CCA. The CCA concept of the German tax authorities is based on the principle of cost pooling. PARTICIPANTs in a CCA form a partnership (undisclosed) with the aim of benefiting from activities that under the basis of the costs grouped within the CCA.