The standard process for enquiries into transfer pricing questions in Germany is the field tax audit. Nearly all international firms undergo continuous, in-depth audits in great detail. Transfer prices are always investigated in audits and routinely form a key area of disputes between tax authorities and tax payers. Compared to other countries, this audit system is much more comprehensive, both in terms of the frequency of audits and the level of detail in which auditors investigate issues.

This article from Bloomberg BNA’s Transfer Pricing Forum examines the very peculiar process of transfer pricing audits in Germany. The authors describe the procedural questions and timelines, as well as the burden of proof and the requirements to disclose relevant information.