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Structure under BEPS Regulations

For medium sized enterprises


Structure optimization under BEPS regulations

As already mentioned on our homepage, the OECD is now acting against profit shifts and the exploitation of tax loopholes by globally operating corporations. This is intended to achieve a higher level of international tax justice. The tax competition between individual nations shall be reduced or made more unattractive by 15 regulations (readable on the website of the German Federal Ministry of Finance or on Wikipedia).

The aim is to establish a stronger link between value added and taxation. In the future, each share of the value chain will be taxed in the country in which the corresponding value added has taken place. In our opinion, this is not realistically feasible, as the quantification and assignment of global projects will hardly be possible.

But this is precisely the danger for medium-sized companies, because these regulations are in force irrespective of all inconsistencies. And in doubt the rights of each individual state are effective. So it is possible that differences arise in the assessment, which part of the value-added has to be assigned to which state. If the entrepreneur can not prove such an attribution, it can happen that he or she has to pay taxes several times.

Particularly exciting in this context is the question of setting up a branch. For example, if a buyer is regularly sent to a supplier in another country, the purchasing process can already be viewed as a part of the value chain. Thus the purchasing company would automatically have established a branch in the suppliers country and has to pay taxes on the part of the value added resulting from the purchase in the country of delivery.

It is therefore important to prepare yourself and to act quickly. Our partner tax advisors and tax attorneys are specialized in this subject and they are looking forward to providing you with advice and assistance.

One solution could be, for example, the founding of a subsidiary for purchasing in Germany. Maybe with the support of Brämer & Partner. This company then resells the purchased goods to the parent company. Now the value added can be allocated to each country by invoice, whereby a verifiable invoicing price documentation has to be observed for affiliated companies. How this works exactly will be explained by us or our partner tax attorney in a personal consultation.

Just to avoid misunderstandings: we do
not help with tax fraud, we show reputable companies how to organize themselves optimally in the given legal situation, in order to avoid tax injustice through multiple taxation.


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