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FRANKFURT,GERMANY--(Marketwire-December9,2011)Meantimewire-BenefitaxGermancharteredaccountantsinFrankfurtamMain,
advisesinvestorstoexaminetheGermantaxsystemintensivelyandinati
melymanner.Otherwiseunpleasantsurprisesawait.Thetaxratesoncorporateprofitsareapproximately30%
inmajorcentersandsomewhatlessinruralareas.Sincethetaxratesarelowerinmanycountries,theGermantaxauthoritiesverifythatthep
rofitoftheGermansubsidiaryhasnotbeenreducedthroughmeasuresinternaltothecompany.
Lossescanbecarriedforwardforanunlimitedtimeandlossset-offswithothergroupcompaniesaresometimespossible.Withholdingtaxof26.4%isusuallydeductedfromdistributionstoshareholders.ForEUparentcompaniesorviadoubletaxationtreaties,withholdingtaxcanbered
ucedtoaslowaszeropercent.Anapplicationforexemptionshouldbesubmittedseveralmonthsbeforethedistribution.
Internationaltaxplanningcandrasticallyreducethegroup'scorporatetaxrate.AccordingtoBenefitaxpartnerOliverBiernat,themostco
mmonmodelsarethesubstitutionofdividendswithloaninterest,royaltiesorfees,ortheuseofforeignholdingcompanies.Forthelatter,us
ingaholdingcompanywithoutsubstancewhichmerelyconsistsofamailboxinataxhavenmustbeavoidedsincethosearenotrecognizedb
ytheGermantaxauthorities.
Analternativeisthedefinitionoftransferpricesforintragroupdeliveriesandservices.ThelargertheGermancompanyis,thestricterthere
quirementsfordocumentationoftransferpricesandproofthattheycorrespondtowhatwouldhavebeennegotiatedwiththirdparties(dealingatarms'length).
Ifadequatetransferpricedocumentationisnotprovidedwithin30or60daysfromthedatethefiscalauthoritiesm
akearequest,theycanmake(high)estimates.Thenthetaxpayerisforcedtopayunlessproofofadifferenttransferpricecanbeprovided.
TaxexpertBiernatthereforehasthisadvice:"PreparetransferpricedocumentationthatmeetstheGermanregulations.Inthiscase,thefis
calauthoritieshavetoprovethatthechosentransferpriceisincorrect.Thisisaneffortthefiscalauthoritieswillhesitatetomakeandonlyun
dertakewhenlargesumsareinvolve
d."
VAT,unknowninmanycountries,isaccountingforanever-growingproportionoftaxrevenuesinGermany.TheregularVATrateis19%.Errors,e.g.whenissuinginvoices,cangetverycostly.While
GermanVATlawislargelyharmonizedwithEuropeanlaw,itisverynontransparentanderror-proneduetoamendments,numerousexceptionsandcomplicated,detailedrules.
Formoreinformationandtoorderour"LawandTaxGuide",visit:
BenefitaxisataxconsultingandpublicauditcompanyinFrankfurt,Germany,focussingonfinancialadministrationofforeignownedGerm
anentitiesandinternationaltaxation.
ContactInformation
Contact:
BenefitaxGmbH
Attn.Mr.OliverBiernat
ManagingPartner
Phone:+49(0)69-25622760
E-Mail:[email protected]">[email protected]
Internet:www.benefitax.com