lunes, 8 de noviembre de 2010

German Government disappoints Taxpayers on business restructurings


The long-awaited administrative principles on business restructurings have at last been published by the German tax authorities on 13 October. The administrative principles are effective from fiscal year 2008.
Overall, the "Principles on the Examination of Income Allocation between Related Tax Payers in Cases of Cross-Border Transfers of Functions" provide some clarifications on the tax administration's positions. However, taxpayers are still left with a high degree of uncertainty and numerous question marks, and face disadvantageous positions taken by the authorities on a number of issues. Particularly disappointing is the passage on the most recent change of the underlying law: only in April 2010, a change to § 1 Foreign Tax Act was adopted that was hoped to allow the taxpayer to avoid the so called package evaluation for a transfer of functions in certain circumstances, and to perform an asset by asset evaluation instead. This approach as now interpreted in the administrative principles still seems to require an overall capitalized earnings or discounted cash flow evaluation.
Fuente: PKN

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