Optimizing the effective tax rate of a group
Careful structuring of transfer price arrangements is particularly
important for optimizing the effective tax rate of a group and
avoiding double taxation as a result of transfer price adjust-
ments.
The selection of tried and tested options (such as the
resale price method vs. The cost-plus, licensing model, or cost
allocation method) may help in this respect. It is also possible to
structure the organization of the group in terms of the various
functions to be performed, or by redistributing the risks and
rewards within the group. This may also be achieved, for exam-
ple, by changing the sales system to a commission basis or by
establishing shared administrative service centers.
The conclusion of advance pricing agreements (APA) is possible
under German tax laws and should be considered. APAs are
possible pursuant to bilateral and multilateral mutual agreement
procedures.
EU Forecast
euf:ba.18g:37/nws-01