The global tax controversy (GTC) is not only something that affects faraway places, but it also hits home in Germany. Many of Germany’s multinational corporations have engaged in GTC, as it has helped them reduced the amount of taxes that have been paid. What have the reactions been and how is GTC affecting the world of international taxation? This article will give you the German perspective on GTC.
GTC: German companies rank among the top of the world
In practical terms GTC in Germany means that some German companies rank among the most effective tax evaders in the world. The companies making the headlines for GTC-related tax evasion practices tend to be large, well-known American companies, but Germany is just as well represented in the GTC landscape.
It was a matter of time before the German political class would respond in kind. Indeed, in September of last year the German government launched a tax tip-off website. This website allows ordinary citizens to snoop on each other. The fact that this is being compared to former East Germany’s Stasi surveillance practices goes to show quite how controversial this website has been.
What does GTC mean for Germany’s internationally operating organizations?
When talking about GTC, it is often a small percentage of all of Germany’s – and other nations’ – internationally operating organizations that get the full attention. There is, however, an array of German organizations – both for and non-profit organizations – that operate internationally. How does GTC affect them?
According to TPA Global, the global tax controversy (GTC) is making it increasingly difficult for Germany’s internationally operating companies to find a safe haven. For them, the risk of getting into a dispute with tax authorities has only increasing. With that, the risk of being fined has burgeoned.
The goal should be to enhance the transfer pricing system and to mitigate the risks associated with this. TPA Global employs highly senior people who have knowledge of taxation, economics, and business. For many organizations, they say, it is needed to hire an external consultancy to enhance the transfer pricing system and to mitigate the risks. Please refer to TPA Global’s website for more information.