On 23 September 2009, the German Federal Fiscal Court published a decision from 24 June 2009 in which it held that the German tax authorities’ right to request data within the scope of a tax audit does not exceed the taxpayer’s obligation to keep records and that the tax authorities have no right to demand additional data which a taxpayer creates voluntarily if such data is not required by law.
In the case under consideration, the taxpayer kept records to the extent legally required and also used an electronic accounting system. Within the scope of a tax audit, the tax authority requested data in the form of the electronic accounts kept for 2002 and 2003. Continue →

The German Foreign Relations Tax Act (Außensteuergesetz or AStG) contains the general rules for applying Germany’s transfer pricing regime and for determining income from cross-border transactions between related parties. In 2008, the AStG was amended by adding new Sec. 1(3), which contains rules on the transfer of business functions abroad, which are subject to transfer pricing principles under German tax law. For clarification purposes, the amended act was accompanied by Function Transfer Regulations (Funktionsverlagerungsverordnung or FVerlV) issued by the German Federal Ministry of Finance (Bundesministerium der Finanzen or BMF). Continue →