With the increase in globalisation and digitalisation, advisory practice is increasingly focusing on international tax law. Even small and medium-sized enterprises have already regularly encountered cross-border taxation issues. Medium-sized enterprises are opening new sales markets, expanding abroad or even relocating entire production facilities to other countries to maintain their competitiveness. As if the complexity of national tax law were not enough, this entails new tax challenges for entrepreneurs and companies. This is because international tax law comprises a large number of individual regulations such as double taxation agreements, national regulations with an international dimension, the German Foreign Tax Act and the rules of EU law on direct taxation.
Transfer pricing is another focal point and often a controversial issue in national and international tax law. Transfer prices as defined in tax law are the prices for goods and services agreed between companies that, although they are considered independent in purely legal terms, are associated with each other through certain shareholding relationships. If these companies are located in different countries, the question arises as to which transfer pricing principles apply. In this case, it is possible to obtain a preliminary understanding and commitment between countries on transfer prices between international companies within the framework of an "Advance Pricing Agreement".
International tax law also plays a role in smaller transactions in the internal market: when supplying goods within the European Union, this is a matter of international VAT law. Triangular transactions, consignment warehouses and chain transactions are frequent problem areas. With the constant reforms to reduce VAT losses and administrative costs, it is important not to lose sight of the overall picture here. Transactions like this also entail VAT registration and reporting obligations for entrepreneurs, which must be observed.
The complexity and increasing significance of international tax law, even for medium-sized enterprises, is therefore not to be ignored and applies to many areas of business activity.
Please do not hesitate to contact us regarding problems or challenges in international tax law, such as in the following areas:
- Value added tax in the European framework
- Input tax reimbursement procedures
- Minimisation of withholding tax on dividends/licences/interest
- Transfer pricing systems and transfer pricing documentation
- Avoidance of double taxation and cross-border tax structuring and optimisation
- Intergovernmental mutual agreement procedures and APA (Advance Pricing Agreement)
- Avoidance of exit taxation and controlled foreign corporation rules (CFC) on the transfer of income
- Double taxation agreements
- Foreign tax law
- Employee secondments
Because of our integration into the internationally established consultancy network XLNC we can provide professional and cross-border solutions even for complex requests.