If a German company or a German permanent establishment is involved and the cross-border services exceed a value of €600,000 p.a. or the deliveries exceed a value of €6 million p.a., transfer pricing documentation that complies with the strict and detailed German regulations must be submitted within 30 days of a tax audit order being issued. This is currently a so-called transaction matrix. In addition, a master file must be submitted if a group’s turnover in the previous year exceeded EUR 100 million. Country-by-country reporting must be prepared if a group’s consolidated turnover in the previous year reached or exceeded EUR 750 million.
At the request of the tax office, all companies that exceed the €600,000/€6 million threshold must also submit a so-called local file.
Even if the above-mentioned limits are not exceeded, you must make it plausible to the tax office on request that your transfer prices are appropriate.
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