Number of anti-abuse provisions

Partly, these provisions give the tax authorities the right to ignore artificial
circumstances and relationships seen as abusive, and partly they make the tax
deductibility of expenditure dependent on full and complete disclosure of the
identity of the other business partner.

Relationships with foreign entities
subject to “low-tax regimes” are subject to special provisions in the Foreign Tax
Act charging a supplementary tax on the indirect German owners of income
accumulated abroad and putting German taxpayers purchasing goods and
services from tax haven countries under an almost impossible burden of proof.
Taxpayers are under an extended duty to cooperate with the tax authorities in
respect of all business relationships with partners outside German jurisdiction
and therefore beyond the reach of the German tax auditors.

Essentially,the German taxpayer must proffer all documentation, information and
explanations from or on the foreign party that would have been available had
he insisted in advance on access rights to the relevant records.