Principal Structures in Europe: A View from Germany and France

The authors discuss a court ruling regarding the reorganization of a US-headquartered group's European structure into a Swiss principal model, which involved converting German entities from residual to routine-margin earners. While the German court concluded no transfer-of-function compensation was required, the debate on transfer pricing methods continues, questioning the consistency of a cost-plus service model of a French entity while being characterized as entrepreneur. It notably emphasizes the importance of functional analysis in determining strategic and operational roles and risks rather than merely simplistic labels like "entrepreneur" or "routine".

Authors

Publication Details

Journal
International Transfer Pricing Journal
Published
2025-05-28
DOI
https://doi.org/10.59403/1prhy8k
Primary Topic
Political Systems and Governance
Type
article
Field-Weighted Citation Impact
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article

Principal Structures in Europe: A View from Germany and France

Y. Weigelt, B. Conort
International Transfer Pricing Journal
Political Systems and Governance
article

Principal Structures in Europe: A View from Germany and France

Y. Weigelt, B. Conort
article en

Abstract

The authors discuss a court ruling regarding the reorganization of a US-headquartered group's European structure into a Swiss principal model, which involved converting German entities from residual to routine-margin earners. While the German court concluded no transfer-of-function compensation was required, the debate on transfer pricing methods continues, questioning the consistency of a cost-plus service model of a French entity while being characterized as entrepreneur. It notably emphasizes the importance of functional analysis in determining strategic and operational roles and risks rather than merely simplistic labels like "entrepreneur" or "routine".

International Transfer Pricing JournalVol. 32(4)
Openalex Percentile: Top 86%
Political Systems and Governance
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Principal Structures in Europe: A View from Germany and France — Y. Weigelt, B. Conort · International Transfer Pricing Journal (2025) | TGRS Research Map | TGRS