Germany’s government has proposed to extend the deadline for taxpayers to submit detailed transfer pricing documentation, and to revise the guidelines for how companies compile information for audits.
Germany’s first chamber approved a bill from the Justice Committee on 26 September 2024 to revise transfer pricing documentation requirements to reduce the bureaucratic burden on taxpayers.
The proposal aims to extend the submission deadline from 30 days for transfer pricing documentation, which will provide taxpayers additional time to prepare and submit comprehensive documentation.
The draft bill also aims to initiate a cross-departmental legislative package to relieve the economy, citizens, and administration from unnecessary bureaucracy. It is expected to provide relief of approximately EUR 944.4 million.
The draft also addresses “unnecessary” regulations that place undue burdens on citizens, businesses, or administration without legitimate justification or where the burden is disproportionate to its goals.
The bill aims to simplify and streamline processes without questioning necessary protection standards.
Other recording obligations include:
- An overview of business transactions (transaction matrix),
- a presentation of the business transactions (transaction documentation) and
- a presentation of the economic and legal basis for an agreement of terms, particularly prices (transfer prices), which observes the arm’s length principle, as well as information on the timing of the transfer pricing determination, the transfer pricing method used, and the comparative data used (appropriateness documentation).
