Legal Documentation Requirements – A Lack of Transparency can be Costly
In accordance with the German Tax Preference Reduction Act (Steuervergünstigungsabbaugesetz), corporate groups and internationally operating companies have to calculate their transfer prices for their foreign subsidiaries for services transferred to a foreign subsidiary on the basis of the arm’s length principle. For this purpose, the prices for tangible and intangible services, in particular IT and Shared Services, have to be calculated usage-based and on the basis of unit costs at conditions in conformity with the market.
In practice, these services are largely accounted for at flat rates and without any relation to the source of the cost. However, transfer prices which are not documented or implausible as well as the transfer of business functions can result in costly additional taxes which can amount to millions of euros.
The Financial Management Solution Anafee enables you to determine unit costs related to the user in the context of the service accounting of your service organization. On the basis of a transparent calculation of your services you determine a plausible margin and thus the relevant transfer price. The accounting is done automatically by multiplying the actual consumption amounts by the relevant transfer prices. The comprehensive reporting functions of Anafee enable you to store all relevant information to be permanently easily accessible.
In addition, the complete transparency of costs and performance of the central services makes comparisons possible. This enables a targeted benchmarking of all services and costs as well as a calculation of fair market prices. The financial authorities audit these prices on the basis of the arm’s length principle.
With Anafee, your entire service organization will be aligned with the requirements of the international accounting provisions (e.g. IAS / IFRS, EuroSOX, BilMoG) as well as the guidelines for long-term archiving (for example the GDPdU German Directive on Data Access and Digital Data) In addition you meet the legal documentation requirements for transfer prices (e.g. German AO §§ 90(3), 162 (3,4)) when accounting or transferring services to foreign companies. The seamless recording of data in Anafee is combined with a strict authorization and role concept in the user administration, which grants you the highest possible confidence in your data history and ensures auditability.
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