Reprinted from 10 March 2003, Worldwide Tax daily, 2003 WTD 46-6 worldwide tax dail Federal council to Decide on german Transfer 级N8-0928或@8品2°9385g Pricing Documentation Regulations by Heinz-Klaus Kroppen and Stephan rasch fore. the future of the tax reform act and the transfer Heinz-Klaus Kroppen, LL.M. and Stephan pricing documentation rules remains unclear Rasch are with deloitte touche Nevertheless, the Federal Ministry of Finance Copyright o Deloitte & Touche, 2002 has prepared a first draft of the rechtsuerordnung (decree-law) regarding the manner, content, and doc umentation required under section 90, paragraph 3 The German Bundesrat (upper house of Parlia- of the General Tax Co ment, or Federal Council) will make a final decision on 14 March on whether to pass the tax reform bill Draft section 90, paragraph 3, sentence 5 of the which includes the transfer pricing documentatio General Tax Code reads as follows "To ensure a con sistent application of the law the Federal Ministry of regulations. The majority of the governing coalition Finance in accordance with the Federal Council will in the Bundestag (lower house of Parliament) ap- be authorized to determine the manner, content, ar proved the latest bill on 21 February 2 extent of the documentation in a decree-Lau emp? The conservative party, which holds a majority in sis added the Bundesrat, has indicated that they may reject the The decree-law therefore amends draft sections whole tax reform package, with the exception There- taxpayer documentation duties. However, draft sec- of pro- 90 and 162 of the General Tax Code which overn posed chang e co orporate tax system tions 90 and 162 only outline, in general terms, that a axpayer is required to prepare documentation for transfer pricing purposes. The Federal Ministry of Finance, under the proposed decree-law, is seeking to See Kroppen/Rasch, 11 Transfer 11 02; Kroppen/Rasch, Tax No See Kroppen/Rasch, Tax Notes Int'l, 18 Nov 2002, pp. 666 ff. 1035 f; Baumhoff, Internationales Steuerrecht 2003, pp. 1 ff. and Tax Notes Int', 10 Dec 2001, pp. 1111 ff for a discussion of For a first analysis see Kroppen/Rasch, 11 Transfer Pricing the reasons that caused the Federal Ministry of Finance to ena Report 885, 10 Feb. 2003; for an unofficial translation, see 11 statutory provisions regarding transfer pricing documentation Transfer Pricing Report 873, 19 Feb 2003 sues and penalties. Tax Analysts- Worldwide Tax DailyFederal Council to Decide on German Transfer Pricing Documentation Regulations by Heinz-Klaus Kroppen and Stephan Rasch The German Bundesrat (upper house of Parlia￾ment, or Federal Council) will make a final decision on 14 March on whether to pass the tax reform bill, which includes the transfer pricing documentation regulations.1 The majority of the governing coalition in the Bundestag (lower house of Parliament) ap￾proved the latest bill on 21 February.2 The conservative party, which holds a majority in the Bundesrat, has indicated that they may reject the whole tax reform package, with the exception of pro￾posed changes to the corporate tax system. There￾fore, the future of the tax reform act and the transfer pricing documentation rules remains unclear. Nevertheless, the Federal Ministry of Finance has prepared a first draft of the Rechtsverordnung (decree-law) regarding the manner, content, and doc￾umentation required under section 90, paragraph 3 of the General Tax Code. Draft section 90, paragraph 3, sentence 5 of the General Tax Code reads as follows: “To ensure a con￾sistent application of the law the Federal Ministry of Finance in accordance with the Federal Council will be authorized to determine the manner, content, and extent of the documentation in a decree-law [empha￾sis added].” The decree-law therefore amends draft sections 90 and 162 of the General Tax Code, which govern taxpayer documentation duties.3 However, draft sec￾tions 90 and 162 only outline, in general terms, that a taxpayer is required to prepare documentation for transfer pricing purposes. The Federal Ministry of Finance, under the proposed decree-law, is seeking to Tax Analysts — Worldwide Tax Daily 1 Reprinted from 10 March 2003, Worldwide Tax Daily, 2003 WTD 46-6 worldwide tax daily Heinz-Klaus Kroppen, LL.M. and Stephan Rasch are with Deloitte & Touche. Copyright © Deloitte & Touche, 2002 (C) Tax Analysts 2003. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content. 1 See Kroppen/Rasch, 11 Transfer Pricing Report 885, 19 Feb. 2003; Rasch/Roeder, 11 Transfer Pricing Report 731, 11 Dec. 2002; Kroppen/Rasch, Tax Notes Int’l, 18 Nov. 2002, pp. 666 ff.; Kroppen/Rasch, Internationale Wirtschaftsbriefe 13 Nov. 2002, pp. 1035 f.; Baumhoff, Internationales Steuerrecht 2003, pp. 1 ff. 2 For a first analysis see Kroppen/Rasch, 11 Transfer Pricing Report 885, 10 Feb. 2003; for an unofficial translation, see 11 Transfer Pricing Report 873, 19 Feb. 2003. 3 See Kroppen/Rasch, Tax Notes Int’l, 18 Nov. 2002, pp. 666 ff., and Tax Notes Int’l, 10 Dec. 2001, pp. 1111 ff for a discussion of the reasons that caused the Federal Ministry of Finance to enact statutory provisions regarding transfer pricing documentation is￾sues and penalties