Summary
In I R 39/23, published on 5 November 2026, the BFH held that a transfer pricing correction under an EU Arbitration Convention mutual agreement does not lower German taxable income on its own. Domestic rules apply, so the reduction is a hidden profit distribution, exempt under section 8b(1) KStG but with a 5% non-deductible add-back.
What it means for you
Indian groups using MAP or arbitration for German transfer pricing disputes should expect domestic adjustments such as the 5% add-back when relief is implemented.
This summary is general information, not legal advice. The outcome of any case depends on its facts; read the source and take advice before acting.
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