The German Federal Fiscal Court decided that the German tax law obligation to prepare and submit transfer pricing (TP) documentation on cross-border related party transactions, and not for domestic related party transactions, (under Sec. 90 para. 3 German Fiscal Code (GFC)) conforms with European law. The Federal Fiscal Court considered its legal assessment to be reasonably clear and free from doubt and for this reason did not refer the case to the European Court of Justice. The conformity of Sec. 90 para. 3 GFC with European law had previously been affirmed in the judgment of the lower Finance Court Hessen (case 4 K 419/10). Besides holding the general obligation to prepare and submit TP documentation to be in line with European law, the Federal Fiscal Court also clarified, with its judgment, the definition of affiliation, for cross-border transactions.
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