Regarding the limits of information gathering within taxation proceedings, German Fiscal Courts regularly held that information, which the tax payer is not obliged to document, cannot be asked for by the tax authorities.

As a result German legislation became increasingly complex and extensively requires tax payers to document and provide proof, e.g. payment of interest, fees and commissions across borders. Regulations on data support in terms of transfer pricing can be regarded as climax of that tendency.

For more see the written paper on Mr. Peter Dehnen´s speech on Transfer Pricing at ABA´s 10th Annual Tax Planning Strategies Conference.

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