The German Ministry of Finance published BMF Letter No. 2024/1078709 on 12 December 2024, updating the guide on transfer pricing for 2024.
The new guidelines clarify key aspects of transfer pricing which includes income correction and competition; selection of appropriate pricing methods, resale price, and cost-plus methods.
The guide also details procedures for conducting arm’s length comparisons ensuring cross-border transactions align with market standards, emphasises the importance of comparability analyses to verify transfer pricing accuracy and highlights the OECD Transfer Pricing Guidelines as the global standard for managing international transactions, etc.
Additionally, the BMF Letter outlines administrative approaches to prevent and resolve transfer pricing conflicts, aiming to reduce disputes between businesses and tax authorities.
These methods help businesses determine the best approach based on their specific circumstances.
