正在加载图片...
790 cannot be concluded generally from the fact that the transferee or its parent company is established in another member state, and therefore the fact cannot justify a fiscal measure that compromises the exercise of a fundamental freedom guaranteed by the treaty .2 4a With similar considerations, the court determined an unjustified obstacle to the freedom of capital movement under Article 56 of the EC Treaty in case of a non-substantial shareholding, which does not give any influence on the direction of the company. 25-0 Consequences on German Transfer Pricing The ECJ court has again emphasized that a different treatment of cases cannot be justified by the fact that one case is a domestic and the other is a cross border case. Cross-border transactions between related and unrelated companies or such companies and their shareholders cannot be treated differently from domestic transactions under the same or similar conditions Section 1, Paragraph 1 of the Foreign Tax Relations Act(AStG) is only applicable on transactions between related companies in different countries. The legal consequence of the provision is a profit German tax law does not provide for an adjustment possibility in such cases. -nout es between a adjustment according to the arm length principle. Contrary to that, the supply of services between a German parent company and its resident subsidiary could be performed without compensation Draft Legislation Germany's legislature is expected to take up in 2003 proposed legislation drafted by the German Finance Ministry that would establish the need for taxpayers to provide detailed documentation about the economical and legal basis for the setting of transfer prices between associated enterprises.7=all these obligations are not fulfilled, taxpayers face the possibility the auditor will estimate the taxpayers arm'sength profits, the burden of proof will shift to the taxpayer, and a surcharge will be imposed according to recent drafts. 28 -Despite the ECj's ruling, the legislation contains provisions that would provide for different treatment of foreign and resident companies concerning documentation requirements because it is only applicable on cross-border transactions. It can be predicted that the German tax authorities will respond to charges of discrimination by referring to the need to prevent tax evasion and the need to secure the coherence of the national tax system. As the judgment of the ECj in the present case shows, this general practice of the German tax authorities will probably not be successful In Case C-436/00, the European court already stated that the danger of tax evasion is not a specific reason to justify an obstacle to the basic freedoms. 9-The need to safeguard the cohesion of the German tax system also cannot justify a different treatment by the German tax provision. This basic principle requires a direct link between the systematic advantage and disadvantage in the taxation of one single person. The adjustment of transfer prices between two related companies does not fulfil this requirement because the advantage or disadvantage of high or respectively low transfer prices affects different taxpayers Lankhorst-Hohorst Similar to the decision in the present case, the ECJ on Dec. 12, 2002, declared the German thin capitalization provisions under Section 8, Paragraph 1 of the No. 2 German Corporate Taxation Act790 cannot be concluded generally from the fact that the transferee or its parent company is established in another member state, and therefore the fact cannot justify a fiscal measure that compromises the exercise of a fundamental freedom guaranteed by the treaty. 24 With similar considerations, the court determined an unjustified obstacle to the freedom of capital movement under Article 56 of the EC Treaty in case of a non-substantial shareholding, which does not give any influence on the direction of the company. 25 Consequences on German Transfer Pricing The ECJ court has again emphasized that a different treatment of cases cannot be justified by the fact that one case is a domestic and the other is a cross border case. Cross-border transactions between related and unrelated companies or such companies and their shareholders cannot be treated differently from domestic transactions under the same or similar conditions. Section 1, Paragraph 1 of the Foreign Tax Relations Act (AStG) is only applicable on transactions between related companies in different countries. The legal consequence of the provision is a profit adjustment according to the arm'-slength principle. Contrary to that, the supply of services between a German parent company and its resident subsidiary could be performed without compensation. German tax law does not provide for an adjustment possibility in such cases. 26 Draft Legislation Germany's legislature is expected to take up in 2003 proposed legislation drafted by the German Finance Ministry that would establish the need for taxpayers to provide detailed documentation about the economical and legal basis for the setting of transfer prices between associated enterprises. 27 If these obligations are not fulfilled, taxpayers face the possibility the auditor will estimate the taxpayer's arm'-slength profits, the burden of proof will shift to the taxpayer, and a surcharge will be imposed, according to recent drafts. 28 Despite the ECJ's ruling, the legislation contains provisions that would provide for different treatment of foreign and resident companies concerning documentation requirements because it is only applicable on cross-border transactions. It can be predicted that the German tax authorities will respond to charges of discrimination by referring to the need to prevent tax evasion and the need to secure the coherence of the national tax system. As the judgment of the ECJ in the present case shows, this general practice of the German tax authorities will probably not be successful. In Case C-436/00, the European court already stated that the danger of tax evasion is not a specific reason to justify an obstacle to the basic freedoms. 29 The need to safeguard the cohesion of the German tax system also cannot justify a different treatment by the German tax provision. This basic principle requires a direct link between the systematic advantage and disadvantage in the taxation of one single person. The adjustment of transfer prices between two related companies does not fulfill this requirement because the advantage or disadvantage of high or respectively low transfer prices affects different taxpayers. Lankhorst-Hohorst Similar to the decision in the present case, the ECJ on Dec. 12, 2002, declared the German thin capitalization provisions under Section 8, Paragraph 1 of the No. 2 German Corporate Taxation Act
<<向上翻页向下翻页>>
©2008-现在 cucdc.com 高等教育资讯网 版权所有