Under German law, a subsidiary that sells profits to the parent company is not a normal business activity. It is generally covered by a profit-and-loss agreement that establishes the formula for the amount of profit to be transferred each year. The formula also applies to the transfer of funds when the parent company reimburses the losses of subsidiaries. Die Deutsche Bahn Gruppe sagt, die Gewinnabf-hrungsvertr-ge seien notwendig, um die Aktion-rsrechte zu schotzen. Shareholders of the parent company have the right to benefit from the company`s profits, including the profits of the subsidiaries. However, the parent company is also required to cover the losses of subsidiaries. The agreement sets the rules in writing instead of letting management decide each year. The minimum duration of an agreement is five calendar years. Buyers and sellers acknowledge that Kendro GmbH made advance payments to SPX Europe prior to the closing date under Kendro GmbH`s profit transfer contract for fiscal years204 and 2005. A company without a profit transfer contract has tax consequences. The agreement shows that both companies have a “tax unit” allowing the parent company to declare the subsidiary`s profits as their own taxable income.
Under German law, the parent company can thus depreciate part of its interest on the subsidiary`s income. If companies do not agree, they do not have that advantage. . When a control and profit transfer agreement between a controlling party of the contracting party expires (and is not renewed) or ends in whole or in part or ceases to enter into force for the purposes of this agreement (except in all cases, except under its conditions), before all of the party`s obligations are fulfilled in each transaction. Fraser Sherman, a graduate of Oberlin College, began writing in 1981. Since then, he has researched and written newspaper and magazine stories about city government, lawsuits, economics, real estate and finance, the use of new technologies and the history of cinema. Sherman has worked as a newspaper journalist for more than a decade, and his magazine articles have been published in “Newsweek,” “Air and Space,” “Backpacker” and “Boys`Life.” Sherman is also the author of three film supplement books, a fourth of which is currently underway. If, according to the appropriate and faithful opinion of the applicant, the ability of the entity concerned to fulfil its obligations under this agreement, any credit support document or a control and profit transfer agreement, is seriously compromised.
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