Germany Approves Tighter Tax Rules for Business Transfers

Germany is further tightening transfer pricing rules for cross-border transfers of business activities, under a federal finance ministry ordinance approved by the Bundesrat on Friday.

According to the ordinance, partial transfers of business activities, or functions, are to be treated the same way as transfers of activities as a whole and reasons will be required for using capitalization periods of limited duration, among other measures.

• The ordinance completes a 2021 law that brought German regulations on the arm’s-length principle—a transfer pricing valuation approach to transactions among related entities—in line with the latest guidelines of the Organization for Economic Cooperation ...