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by Alexander Vögele and William Bader
The following article first appeared in the February 2001 issue of International Tax Review under the title "German Turn of Document Screw"
For disclaimer and copyright see end of this article.
Tighter documentation requirements are the essence of Germany's new draft transfer pricing regulations. Taxpayers who fail to react long before audit time rolls around face grave risks. But those who respond in timely fashion can reap double rewards.
1. Introduction
Germany is in the process of modernising its transfer pricing machinery to better defend its share of tax revenues in a global economy. Proposed regulations governing documentation requirements and other procedural matters were issued in August 2000. The German national and state tax authorities are known to be in substantial agreement on the terms of the current draft, which satisfy
