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Transfer Pricing Forum -- Germany

1 July 2011
By Dr. Alexander Voegele and Philip de Homont et al.

This article from BNA's Transfer Pricing Forum examines how Germany's fiscal authorities address the challenge of attributing profits to permanent establishments (PEs). Among others, the cases discussed involve the issue of turnkey contracts for the supply, installation, commissioning, and testing of large equipment when both offshore and onshore legs of work are involved. The authors also discuss when German fiscal authorities might accept a "cost plus" method of attributing profits to a PE created by a foreign company; and the circumstances under which the "service PE" concept might be applied.