: Transfer Pricing in Germany Dr. Heinz-Klaus Kroppen, LLM Axel Eigeshoven .r. Achim Roeder,ma Extract from: Feinschreiber, Robert: Transfer Pricing International: A-Country-by-Country Guide, New York 2000 CHAPTER 24 Germany Heinz-Klaus Kroppen Axel Eigelshoven Achim Roeder 24.1 Introduction (a) U.S.Impact (b)German Tax Audits ()Arbitration and Tax Changes 24.2 Provisions for the Determination of Transfer Prices (a)Administrative Principles for Transfer Prices (b)Hidden Profit Distributions (c) Hidden Capital Contribution (d) Section 1 of the Foreign Tax Code (e) Article 9 of the Tax Treaties 24.3 Relevant Principles to Derive the Arm's Length Price (a) Comparability Analysis (b) Contractual Relationship as a Starting Point (c)Range of Prices (d) Aggregation of Transactions and Multiple-Year Analysis 24.4 Acceptable Methods in Germany (a)Standard Methods ndaro (b) Transactional Net Margin Method/Comparable Profit Method (c)Profit Split Method (d)Choice of Methods 24.5 Practical Areas of the Application of Transfer Pricing Rules () Distribution Companies (b) Contract Manufacturing (c) Provision of Services 24-1