Documentation (local file and root file) should not be put in place at the time of the transaction or as part of a tax return, but should be provided only on request during a tax audit. However.B, in the case of exceptional business transactions (e.g., restructuring, cost-sharing, other important long-term agreements), documents must be prepared within six months of the end of the fiscal year in which the transaction took place (but again, it should only be provided on request as part of a tax audit). The contracting parties take note of certain old German profit and loss transfer agreements („PLTA”). In accordance with the Federal Ministry of Finance circular of April 3, 2019, the PLTA must be amended by December 31, 2019 with controlled SARLs („SARL”) to ensure that an existing income tax group will continue to be recognized in the future. When a parent company holds more than 50% of the voting rights in a subsidiary established in Germany, these two companies can enter into a formal profit and loss pool (PLPA) contract, which must be concluded for a period of at least five years. If certain conditions are met, the resulting relationship is called an organ. The annual results of an organ are actually grouped at the parent level. The subsidiary of the tax group itself is subject to only 20/17 of the compensation paid to external minority shareholders, if any. Profits and losses within a group can therefore be offset, but there is no provision for the elimination of intra-group profits across the entire taxable base. It should also be noted that negative income collected by the parent company or subsidiary within an organization is excluded from compensation in the same year or another year if a foreign country takes this into account for the taxation of a member of the organization or other organization. The contracting parties take note of certain old German profit and loss transfer agreements („PLTA”).
In accordance with the Federal Ministry of Finance circular of April 3, 2019, the PLTA must be amended by December 31, 2019 with controlled SARLs („SARL”) to ensure that an existing income tax group will continue to be recognized in the future. The PLTTs concerned include those that were closed before 1 January 2006 and do not contain references to the provisions of Article 302, paragraph 4, of the Act of 9 December 2004. These references may contain formulations such as .B. „Losses are covered in accordance with Article 302, paragraphs 1 to 3, of the act.” According to the administration`s previous opinion (BMF of December 16, 2005), this requirement did not apply to contracts concluded before January 1, 2006. The Bundesfinanzhof decided otherwise in its judgment of 10 May 2017 (DStR 2017, 2429). The BMF is now following this interpretation. Existing contracts must therefore be amended by December 31, 2019 to include a dynamic reference to the modified version of page 302 of the aktG in its current version. The minimum five-year period for tax groups has not been revived.
The amendment to the PLTA must be made in writing and approved by the shareholders of the control company and by the parent company. The decision of the GmbH shareholder must be notarized and recorded in its trade register so that the transposition can begin in a timely manner. For subsidiaries in the legal form of a limited company (i.e. AGs and not limited liability companies such as SARLs), AktG Rule 302 already applies to the law.