Author: Courts of Venezuela

Venezuela vs. Brightstar, 23. Feb 2017, Tax Court of Caracas

The Venezuelan tax authority claimed that Brightstar‘s profitability was not arm’s length, based on the profitability of comparable companies, cf. the Transactional Net Margin Method. The tax court ruled that Brightstar de Venezuela had correctly applied the TNMM and the tax auditors made a mistake when they calculated Brightstar’s profitability. The tax authorities should have analyzed each individual transaction and taken into account the segmented financial information of the audited transaction. The tax court annulled the adjustment due to non-compliance with the 2010 OECD TP Guidelines ... Read more

Venezuela vs. Sodexho, 15. Dec 2016, Tax Court of Caracas

Sodexho Venezuela had appealed an adjustment made under the Venezuelan transfer pricing rules. The tax authorities claimed that the interest rate charged by Sodexho on a loan, made to a related party outside Venezuela, was not at arm’s-length. The tax authorities claimed that when applying the CUP method and comparing the controlled transaction with an uncontrolled transaction, Sodexho Pass Venezuela should have used an active rate such as the prime rate. The tax court ruled that Sodexho had correctly applied the CUP method and therefore cancelled the transfer pricing adjustment ... Read more