Tax law

The test at the centre of international tax is a sentence about a deal that never happened, and German writes it in the one mood built for that. Under der Fremdvergleichsgrundsatz the question is not what two related companies agreed but what unrelated parties would have agreed: was fremde Dritte vereinbart hätten. That is the past subjunctive, hätten plus the past participle, and the whole test rests on it. Put the indicative in its place, was fremde Dritte vereinbart haben, and the sentence claims that such a deal exists and can be looked up, which is exactly what an auditor cannot assume. The same form carries the arguments around it: what a prudent manager getan hätte, what the price gewesen wäre. Verbs that form their perfect with sein take wäre here, never hätte.