If a German company or a German permanent establishment is involved and if the cross-border services exceed a value of € 600,000 p.a. or the supplies exceed a value of € 6 million p.a, a transfer pricing documentation must be presented, which corresponds to the strict and detailed regulations. Companies, which have not fulfilled this obligation, must expect to be charged with severe penalties of up to € 1 million and must additionally refute the potentially very high profit estimation of the tax office. Companies, which submit a transfer pricing documentation according to the standard norms, must be able to prove to the tax office that the transfer prices are correct.
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