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Tax Allocation Agreement

Tax Allocation Agreement Template for Germany

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Key Requirements PROMPT example:

Tax Allocation Agreement

"I need a Tax Allocation Agreement under German law for our corporate group structure consisting of a parent company and three wholly-owned manufacturing subsidiaries, with specific provisions for handling trade tax allocation and quarterly settlement procedures."

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Document background
Tax Allocation Agreements are essential instruments in German corporate group structures where a tax unity (Organschaft) exists or is being established. These agreements are particularly crucial when a parent company and its subsidiaries operate as a consolidated group for tax purposes. The document outlines the mechanisms for allocating tax liabilities, managing tax payments and refunds, and handling tax-related responsibilities within the group. It must comply with specific requirements under German tax law, including the Corporate Income Tax Act and Commercial Code. The Tax Allocation Agreement typically includes detailed provisions for calculating individual and consolidated tax positions, timing of settlements, information sharing requirements, and procedures for handling tax audits. This type of agreement is fundamental for groups seeking to optimize their tax structure while maintaining compliance with German regulatory requirements.
Suggested Sections

1. Parties: Identification of the controlling entity (parent company) and controlled entity (subsidiary) entering into the tax allocation agreement

2. Background: Description of the corporate group structure and the existence/intention to form a tax unity (Organschaft)

3. Definitions: Key terms including Tax Group, Fiscal Year, Tax Assessment, Tax Payment, Tax Refund, and other relevant terminology

4. Scope of Tax Unity: Definition of taxes covered by the agreement (corporate income tax, trade tax, solidarity surcharge)

5. Tax Calculation and Assessment: Methodology for calculating individual and consolidated tax positions

6. Payment Terms and Timing: Specifications for the timing and method of tax payments and settlements between parties

7. Record Keeping and Information Exchange: Obligations regarding maintenance and sharing of tax-relevant documentation

8. Term and Termination: Duration of the agreement and conditions for termination

9. Governing Law and Jurisdiction: Specification of German law application and jurisdiction for disputes

10. Severability: Standard clause ensuring remainder of agreement stays in effect if parts are invalid

Optional Sections

1. Change in Ownership Provisions: Additional provisions addressing potential changes in group structure or ownership - include when dealing with listed companies or anticipated M&A

2. Tax Audit Procedures: Specific procedures for handling tax audits - recommended for larger corporate groups

3. International Tax Provisions: Provisions dealing with international tax aspects - include when group has international operations

4. Limitation of Liability: Specific limitations on liability between group members - relevant for groups with complex structures

5. Dispute Resolution: Detailed dispute resolution procedures - recommended for larger groups or when specific internal procedures are desired

Suggested Schedules

1. Schedule 1: Group Structure Chart: Detailed diagram showing the corporate structure of the tax group

2. Schedule 2: Calculation Methodology: Detailed methodology for calculating tax allocations and adjustments

3. Schedule 3: Payment Procedures: Specific procedures and timelines for making tax payments and settlements

4. Appendix A: Contact Details: List of key contacts and their roles in tax matters for each party

5. Appendix B: Required Documentation: List of documentation required to be maintained and shared between parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈË°æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions






























Clauses
























Relevant Industries

Financial Services

Manufacturing

Technology

Retail

Energy

Healthcare

Real Estate

Telecommunications

Automotive

Professional Services

Relevant Teams

Legal

Finance

Tax

Treasury

Compliance

Risk Management

Corporate Governance

Accounting

Relevant Roles

Chief Financial Officer

Tax Director

Head of Tax

Finance Director

Corporate Controller

Tax Manager

Legal Counsel

General Counsel

Corporate Secretary

Treasury Manager

Financial Controller

Compliance Officer

Risk Manager

Group Accountant

Tax Accountant

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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