International Tax / Transfer Pricing
Act safely and efficiently on cross border transactions
Global tax strategies, local Know-how
Trinity Tax guides you through the complex web of international tax regulations and assists with modelling efficient transfer pricing structures. Our goal is to avoid double taxation and minimise tax risks, ensuring that your operations remain compliant worldwide and economically efficient.
Our Core Services
Individuals
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Analysis of residency and tax obligations in Germany and abroad, taking into account double taxation treaties
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Fulfilment of national filing obligations and communication with foreign advisors
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Advice on planned relocation from Germany
Transfer Pricing
Modelling and review of transfer pricing structures, aligned with internal controlling requirements
Support in preparing transaction matrices, Local and Master Files
Guidance on implementing transfer pricing tracking in financial data
Corporations
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Analysis of existing and planned permanent establishments domestically and internationally
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Optimisation of international tax burdens while ensuring compliance with national and international regulations
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Advice and optimisation of withholding tax obligations
Frequently Asked Questions
What is "international tax"?
International tax governs how the income and profits of individuals and companies are taxed in cross-border activities.
Its main goals are to prevent double taxation and to ensure that taxing rights are fairly allocated between countries. It consists of national tax laws, double tax treaties, and EU directives.
What does “residency” mean and why is it important?
In international tax law, residency is a key factor in determining which countries have the right to tax a person or company.
For individuals, this generally refers to their place of residence, and for companies, it is often the place of management. Misunderstandings in this area are a common source of tax complications.
What are transfer prices? What does DEMPE mean?
Transfer pricing determines how goods, services or intangible assets are priced between related parties. It prevents profits from being deliberately shifted to countries with lower tax rates. The core principle of transfer pricing is the arm’s length principle, which requires intercompany prices to be set as they would be between independent parties. Transfer pricing has become one of the key audit focus areas for tax authorities worldwide, as intercompany pricing significantly influences the tax base in each country.
For the analysis of intangible assets (in particular IP), the OECD has developed the DEMPE concept. Through the allocation of these key functions, it is determined within the corporate group which entity is entitled to the corresponding profits.
What is a Principal Model?
Especially in the mid-sized business sector, corporate groups have often grown historically in such a way that the headquarters are usually located in the country of incorporation, where all key business decisions and processes are centralized. Abroad, there are typically smaller production or distribution entities that do not assume any significant opportunities or risks. In this scenario, from a transfer pricing perspective, the headquarters acts as the principal, meaning that after deducting arm’s length remuneration for the foreign entities, the residual profit of the corporate group is allocated to this entity.
What is the most important aspect of transfer pricing?
In our view, the most critical – and often most challenging – element is the modelling and integration of transfer prices into financial data and intercompany agreements. While detailed Local and Master Files remain useful, their relative importance is decreasing as shown by the publication of transaction matrices. Tax authorities are increasingly demanding that IC transactions are recorded timely and accurately in the financial data of corporations.