Document background
Tax Sharing Agreements are essential instruments for corporate groups operating in Germany who wish to efficiently manage their tax obligations across multiple entities. These agreements are particularly relevant when companies operate under the German tax consolidation regime (Organschaft), which allows for the fiscal integration of subsidiaries with their parent company. The Tax Sharing Agreement specifically addresses how tax liabilities, benefits, and responsibilities are distributed among group members, ensuring compliance with German tax regulations while providing a clear framework for internal tax allocations. The document becomes crucial when companies need to establish formal arrangements for sharing tax burdens and benefits, managing group tax payments, and coordinating tax compliance activities across the corporate structure. It typically includes detailed provisions for calculating individual contributions, payment mechanisms, and procedures for handling tax audits and disputes.
