German Transfer Pricing Modifications: Challenges for Multinational Taxpayers

October 13, 20210

Germany has modified its transfer pricing legislation and set of transfer pricing guidelines. We expect major challenges for multinational taxpayers.

In light of the German modified transfer pricing legislation and transfer pricing guidelines concerning:

  • The Deduction Tax Relief Modernization Act and the ATAD Implementation Act, both from June 2021, include a reform of the Foreign Tax Act (AStG) and a restructuring of § 1 AStG,
  • The fundamental reform of the AStG includes an alignment of the German transfer pricing principles with the OECD Transfer Pricing Guidelines
  • New administrative principles of 2020
  • New administrative principles transfer pricing from July 2021

The webinar will present the changes and gives examples for the essential areas as follows:

  • Analysis of the tightening measures that will lead to challenges for multinationals and increase the risk of tax disputes.
  • Application of the DEMPE concept in Germany
  • Obligations of cooperation for the taxpayer and possibilities of the tax administration for adjustments and estimates
  • Dealing with benchmarking studies and challenges arising from future tax audits by interpretations of the tax authorities
  • Dealing with financial transactions: Economic justification of loans and choice of method to prove arm’s length behavior


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