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By Dinko DINEV, Transfer Pricing Partner Pascal GERHARDT, Transfer Pricing Senior Manager at Deloitte Luxembourg
On 22 March 2024, the German Federal Council approved the Wachstumschancengesetz (“the Act”), effective as of 1 January 2024. It introduces key changes to transfer pricing rules for cross-border financial transactions. This legislation includes comprehensive reforms to enhance compliance with the arm’s length principle, particularly in the area of controlled financial transactions. Although the Act currently applies mainly to inbound cases, in order to comply with the arm’s length principle, which applies to in- and outbound cases, it is highly relevant for Luxembourg-based companies engaged in cross-border transactions with German entities....
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