Comparability analysis of the business activity

An auxiliary or ancillary account
has to be set up, which contains all components that are to be
attributed to the permanent establishment on the basis of its
personnel functions. These include the assets, if an independent
enterprise had to consider them in the determination of taxable
income, the dotation capital, the liabilities, as well as the related
business revenue and expenses (including deemed business
revenue and expenses based on the dealings).

The auxiliary and
ancillary account must be set up at the beginning of the fscal
year, continuously updated, and closed by the end of the fscal
year. The closing of the auxiliary and ancillary account shall show
the operating proft of the permanent establishment. The auxilia-
ry and ancillary account must be completed at the latest on the
date of submission of a tax statement, which is a requirement
for the enterprise pursuant to § 149 AO (Tax Procedure Law) and
which has to take the income of the permanent establishment
into account.

Enterprises that are not required to maintain books,
neither under domestic nor under international law, and that
de facto do not maintain books must prepare the auxiliary and
ancillary account on the basis of the cash method of accounting
within the meaning of § 4 (3) EStG – Income Tax Law.