In November 2005, the EU Commission issued a proposal for a Code of Conduct on transfer pricing documentation that would standardize and partly centralize transfer pricing documentation within the EU. Many other jurisdictions have either introduced, or are planning to introduce, their own regulations on the documentation they require. In response to these developments, BNA International has published Transfer Pricing Documentation, a special report providing country-by-country details and expert commentary on transfer pricing documentation in key jurisdictions around the world.

NERA Special Consultant Dr. Alexander Voegele and Florence Forster of University Paris I, Sorbonne contributed the section on Germany, which provides an analysis of the German Administrative Principles recently issued by the Federal Ministry of Finance. The Administrative Principles serve as guidelines for German tax authorities and auditors regarding transfer pricing and income allocation issues such as base shifting, continuing losses, and advance pricing agreements. Dr. Voegele and Ms. Forster discuss the implications of the Administrative Principles, and advise taxpayers filing returns in Germany to consider the consequences of and develop sound documentation strategies consistent with these new guidelines.

This article, which first appeared in the April 2006 publication Transfer Pricing Documentation, a Tax Planning International Special Report, has been reproduced with permission from the publisher. All rights reserved. For more information, please visit www.bnai.com.