Germany’s New Transfer Pricing Compliance Rules for 2025

Stricter deadlines, higher penalties effective January 1, 2015

| Image credits: Berlin, World clock, Alexanderplatz Image by WagnerAnne.

The German transfer pricing landscape is undergoing significant changes effective January 1, 2025, including stricter submission deadlines, expanded documentation requirements, and higher penalties for non-compliance.

KEY CHANGES IN COMPLIANCE

1. Shortened Submission Deadlines

Local and Master Files: 60 days reduced to 30 days.
Extraordinary Transfer Pricing Documentation: Remains at 30 days.

2. Expanded Authority to Request Documentation

Documentation requests no longer limited to tax audits.
Examples of additional triggers: annual tax assessments, APA applications.

3. Mandatory Submissions During Tax Audits

Automatic submission requirements for specific documents.
Details on the 30-day deadline for Local File submission upon request.

4. Introduction of Transaction Matrix

Mandatory as part of Transfer Pricing Documentation under BEG IV.
Overview of required content and associated penalties.

RECAP OF TRANSFER PRICING DOCUMENTATION REQUIREMENTS

Requirement	Threshold/Trigger	Deadline	Details
Local File	Tangible goods > €6M or other transactions > €600K annually	30 days after request	Includes cross-border transactions; must be ready proactively.
Master File	Group revenue > €100M in preceding fiscal year	30 days after request	Required for large multinational groups.
Extraordinary Documentation	Extraordinary transactions (e.g., restructuring, cost allocation agreements)	6 months after fiscal year-end	Covers long-term contract changes, asset transfers, or shifts in company risks/functions.
Transaction Matrix	All intercompany transactions	30 days after request	Failure to submit timely results in €5,000 penalty.

PENALTIES FOR NON-COMPLIANCE

Type of Non-Compliance	Penalty Amount
Failure to submit documentation	Minimum fine: €5,000; 5–10% of additional income assessed, if > €5,000.
Inadequate documentation submission	Treated as non-submission; same penalties apply.
Delayed submission	Up to €1,000,000, but at least €100 per full day of delay.
Failure to submit Transaction Matrix	Fixed penalty of €5,000 for late or missing submission.

SOURCES/ RECOMMENDED READ:

EMEA

Germany

Transfer Pricing