Relocations of Functions and Adjustment Payments in Transfer Pricing

15 July 2019
By Dr. Yves Hervé and Philip de Homont

In the July/August issue of International Tax Review, NERA Managing Director Dr. Yves Hervé and Associate Director Philip de Homont continue their series on “hard-to-value intangibles” from a German perspective.

Germany has been an early indicator of how the OECD’s new rules on so called “hard-to-value intangibles” may look when implemented at the national level. In 2010, Germany enacted rules on “relocations of functions” (Funktionsverlagerung) and these rules have given rise to many disputes in the field of tax audits throughout Germany. In their article, the authors examine these rules and the lessons learned in light of the new OECD rules.