Transfer Pricing End-of-Year Adjustments in Germany

While the transactional net margin method including transfer pricing adjustments at quarter-end or year-end is commonly applied by German taxpayers, there are some pitfalls from a German corporate income tax, VAT and custom perspective. German tax auditors and customs auditors are likely to investigate those transfer pricing adjustments more closely. Transfer pricing adjustments at quarter-end or year-end, however, can still be successfully managed in Germany, also during German tax audits.This article is part of a special issue of the International Transfer Pricing Journal on transfer pricing end-of-year adjustments. The other articles include the General Report and contributions on Belgium, France, Ireland, Italy, Korea, the Netherlands, Spain, the United Kingdom and the United States.