Author: TP News

US Supreme Court denies Whirlpool’s request for judicial review of the 2021 judgement from the Court of Appeal.

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21 November 2022 the US Supreme Court denied Whirlpool its request for judicial review of the December 2021 judgement of the Court of Appeal (Sixth Circuit).     10 August 2022 Whirlpool filed a “petition for writ” with the Supreme Court of the United States. “Petitioners Whirlpool Financial Corporation & Consolidated Subsidiaries and Whirlpool International Holdings S.à.r.l. & Consolidated Subsidiaries collectively, “Whirlpool”) respectfully petition this Court for a writ of certiorari to review the judgment […]

TELE2 announces SEK 1,8 billion victory in Swedish Courts

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In a press release dated November 7, 2022, TELE2 announced a SEK 1,8 billion win related to tax deductions for foreign exchange losses on intra-group loans, that had previously been disallowed by the Swedish tax authorities in an assessment issued back in 2019. According to the tax authorities the company would not – at arms length – have agreed to a currency conversion of certain intra-group loans which resulted in the loss. Tele2 appealed the […]

Caterpillar announces $740 million settlement with the IRS

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In a press release dated October 27, 2022, Caterpillar announced that a $740 million settlement had been reached with the IRS related to tax issues for FY 2007 through 2016.   In the third quarter of 2022, the company reached a settlement with the U.S. Internal Revenue Service (IRS) that resolves all issues for tax years 2007 through 2016, without any penalties. The company’s settlement includes, among other issues, the resolution of disputed tax treatment […]

Credit Suisse enters EUR 238 million settlement agreement in France

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A settlement agreement between the French Financial Public Prosecutor and Credit Suisse was announced in the Paris Court of Appeal 24 October 2022. The “CJIP” agreement brings an end to investigations in France over whether the Swiss bank facilitated and aided clients in tax avoidance. (English translation of the press release from the French Public Prosecutor) On 24 October 2022, the President of the Paris Judicial Court validated the judicial public interest agreement (CJIP) concluded […]

Banca Generali announces EUR 45 Million Settlement with Italian Revenue Agency

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Italian financial institute, Banca Generali, has signed a agreement with the Italian Revenue Agency, whereby the parties agreed upon the terms and conditions for the settlement of tax claims in relation to transfer pricing for FY 2014 to 2018. Under the agreement, Banca Generali will incur an additional tax charge of €45.99 million for FY 2014-2018. The tax dispute relates to remuneration for a transfer in 2008 of fund management activities in Italian to a […]

Uber-files – Tax Avoidance promoted by the Netherlands

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Uber files – confidential documents, leaked to The Guardian newspaper shows that Uber in 2015 sought to deflect attention from its Dutch conduits and Caribbean tax shelters by helping tax authorities collect taxes from its drivers. At that time, Uber’s Dutch subsidiary received payments from customers hiring cars in cities around the world (except US and China), and after paying the drivers, profits were routed on as royalty fees to Bermuda, thus avoiding corporate income […]

Rio Tinto has agreed to pay AUS$ 1 billion to settle a dispute with Australian Taxation Office over its Singapore Marketing Hub

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On 20 July 2022 Australian mining group Rio Tinto issued a press release announcing that a A$ 1 billion settlement had been reached with the Australian Taxation Office. “The agreement resolves the disagreement relating to interest on an isolated borrowing used to pay an intragroup dividend in 2015. It also separately resolves the pricing of certain transactions between Rio Tinto entities based in Australia and the Group’s commercial centre in Singapore from 2010-2021 and provides […]

The Netherlands releases New 2022 Decree on application of the Arm’s Length Principle

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On 1 July 2022, the tax authorities in the Netherlands published Decree No. 2022-0000139020 of 14 June 2022 containing local guidance on application of the arm’s length principle. The Decree is based on article 9 of the OECD Model Tax Convention and the OECD Transfer Pricing Guidelines and also contains references to local case laws. In the Decree, particular focus is on areas that have been updated in the most recent releases of the OECD […]

McDonald’s has agreed to pay €1.25bn to settle a dispute with French authorities over excessive royalty payments to Luxembourg

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On 16 June 2022 McDonald’s France entered into an settlement agreement according to which it will pay €1.245 billion in back taxes and fines to the French tax authorities. The settlement agreement resulted from investigations carried out by the French tax authorities in regards to abnormally high royalties transferred from McDonald’s France to McDonald’s Luxembourg following an intra group restructuring in 2009. McDonald’s France doubled its royalty payments from 5% to 10% of restaurant turnover, […]

AFIP has published a non exhaustive list of Low and No Tax Jurisdictions (LNTJ)

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The Federal Tax Administration of Argentine (AFIP) has published a non exhaustive list of 41 Low and No Tax Jurisdictions (LNTJ). The list related to Law 27,430 from 29 December 2017 which introduced certain adverse tax implications for transactions with LNTJs. For instance, according to the Law transactions with unrelated parties in LNTJs are not deemed arm’s length for transfer pricing purposes. Furthermore such transactions are required to be reported to the tax authorities. LNTJs […]

Amgen in Billion Dollar Transfer Pricing Dispute with the IRS

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Amgen, in its quarterly report for the period ended March 31, 2022, disclosed that, not only has the group been issued a notice of assessments from the IRS for FY 2010-2012 resulting in additional taxes of approximately $3.6 billion plus interest – as previously reported – it has also received a Revenue Agent Reports (RAR) for 2013-2015 resulting in additional taxes of approximately $5.1 billion, plus interest and penalties of approximately $2.0 billion. Furthermore, it […]

Tokyo High Court rules in favour of NGK Insulators

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In a decision issued on March 10, 2022 the Tokyo High Court upheld a 2020 decision from the district court and ruled mostly in favour of NGK INSULTATORS, LTD. in an appeal filed against a transfer pricing correction issued in 2012 by the Japanese tax authorities.   The case At issue was whether the royalties received by NGK Insulators, the HQ of a Japanese group, from its Polish subsidiary, were lower than the arm’s length […]

Exor in €746 million settlement with the Italian Tax Authorities

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In a press release dated February 18, 2022, Exor announced that a €746 million settlement had been reached with the Italian Tax Authorities (“Agenzia delle Entrate”) related to a cross-border merger in December 2016 that resulted in all the activities of the group being moved from Italy to the Netherlands. According to Exor the exit tax claimed by the tax authorities was a result of a changed interpretation of Italien Participation Exemption rules issued by […]

OECD releases new 2022 edition of the OECD Transfer Pricing Guidelines

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On 20 January 2022 the OECD released the 2022 edition of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. The OECD Transfer Pricing Guidelines provide guidance on the application of the “arm’s length principle”, which represents the international consensus on the valuation, for income tax purposes, of cross-border transactions between associated enterprises. In today’s economy where multinational enterprises play an increasingly prominent role, transfer pricing continues to be high on the agenda […]

Finnish TP-Legislation updated to include non-recognition and recharacterisation

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Effective as of 1. January 2022 Finnish Transfer Pricing legislation has been updated to align the rules with the OECD Transfer Pricing Guidelines in regards to non-recognition and recharacterisation. Going forward the arm’s length provision in the Tax Procedure Act, section 31, will include the possibility for non-recognition and recharacterisation which according to Finnish Case Law has not been possible under the previous wording of the provision.  

Swiss UBS bank to pay € 1,8 billion fine for “facilitation of tax evasion and money laundering”

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The appeal court in Paris has confirmed that the Swiss UBS banking group is guilty of having facilitated tax evasion and money laundering in France, and on that basis the banking group was issued a €5,625 million fine plus confiscation of €1 billion and damages in the sum of €800 millions. Read the December 2021 judgement here

EU directive on minimum effective tax rate – implementation of OECD Pillar II

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The European Commission has proposed a Directive ensuring a minimum effective tax rate for the global activities of large multinational groups. The proposal delivers on the EU’s pledge to move extremely swiftly and be among the first to implement the recent historic global tax reform agreement, which aims to bring fairness, transparency and stability to the international corporate tax framework. The proposed directive follows closely the international agreement and sets out how the principles of […]

ResMed Inc has entered a $381.7 million tax settlement agreement with the Australian Tax Office

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ResMed – a world-leading digital health company – in an October 2021 publication of results for the first quarter of FY 2022, informs that a $381.7 million tax settlement agreement has been entered with the Australian Tax Office. The dispute concerns the years 2009 through 2018, in which the ATO alleged that ResMed should have paid additional Australian taxes on income derived from the company’s Singapore operations. Excerpts from the announcement “Operating cash flow for […]

Pandora Papers – a new leak of financial records

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A new huge leak of financial records revealed by ICIJ, once again shows widespread use of offshore accounts, shell companies and trusts to hide wealth and/or avoid taxes. The new leak is known as the Pandora Papers and follows other recent leaks – lux leak, panama papers, paradise papers. The International Consortium of Investigative Journalists obtained 11.9 million confidential documents from 14 separate legal and financial services firms, which the group said offered “a sweeping […]

ATO and Singtel in Court over Intra-company Financing Arrangement

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In 2001, Singtel, through its wholly owned Australian subsidiary, Singapore Telecom Australia Investments Pty Limited (Singtel Au), acquired the majority of the shares in Cable & Wireless Optus for $17.2 billion. The tax consequences of this acqusition was decided by the Federal Court in Cable & Wireless Australia & Pacific Holding BV (in liquiatie) v Commissioner of Taxation [2017] FCAFC 71. Cable & Wireless argued that part of the price paid under a share buy-back […]

Perrigo has settled its €1.6 billion tax bill with the Irish Revenue for €297 million

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Pharmaceutical group Perrigo has settled a €1.6 billion case with the Irish Revenue Commissioners for €297 million. Perrigo was issued a tax assessment in 2018. The assessment related to Perrigo’s tax treatment of income generated by the sale of the rights to Tysabri – a drug for the treatement of multiple sclerosis. The tax authorities held that proceeds form the sale of these rights – more than $ billion – was a capital transaction taxed […]

OECD releases statement on support of the two pillar tax plan – joined by 130 countries

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A OECD statement has been issued where 130 countries and jurisdictions have agreed to join and support the two pillar plan. A small group of 9 countries have not yet joined the Statement. “The two-pillar package aims to ensure that large Multinational Enterprises (MNEs) pay tax where they operate and earn profits, while adding much-needed certainty and stability to the international tax system. Pillar One will ensure a fairer distribution of profits and taxing rights […]

G7 Support for OECD’s proposal on a Global Tax Reform – Pillar I and II

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The G7 has agreed to back an international agreement on global tax reforms aimed at ending the reign of tax havens and have big international companies start paying their fair share of taxes. Under Pillar One of the reform, multinationals will be required to pay tax in the countries where they sell there products – and not just where they have their headquarters. The rules would apply to largest global firms with at least a […]

US Senate Committee request records related to tax schemes involving Caterpillar and Renaissance Technologies

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In a letter dated 28. April 2021 the US Senate Committee on Finance has request records related to tax schemes involving Caterpillar and Renaissance Technologies. “In 2015, Caterpillar disclosed that a federal grand jury in Illinois had begun investigating an alleged tax scheme involving the company’s Swiss subsidiary. This investigation led to raids by federal agents on three different Caterpillar offices in March 2017. 4 Days after the raids, Caterpillar announced it retained Mr. Barr […]

UN releases New 2021 Practical Manual on Transfer Pricing

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On 27 February 2021 UN released a new 2021 Practical Manual on Transfer Pricing. “…this third edition of the Manual makes improvements in usability and practical relevance, updates and improves the existing text, including on Country Practices (Part D) and has new content, in particular, on financial transactions, profit splits, centralized procurement functions and comparability issues. Improved capacity development based on the Manual has encouraged and contextualized developing country feedback, helped identify these priority areas […]

Bristol-Myers Squibb in Dispute with IRS over “Abusive Offshore Scheme”

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According to the IRS, Bristol-Myers Squibb reduces its U.S. taxes by holding valuable intangibles in an Irish subsidiary. In a legal analysis, the IRS concluded that the Irish scheme saves Bristol-Myers Squibb up to $1.38 billion in US taxes. From Bristol-Myers Squibb’s 2019 10-K form, “Note 7. Income Taxes” “BMS is currently under examination by a number of tax authorities which have proposed or are considering proposing material adjustments to tax positions for issues such […]

Airbnb under examination by the Internal Revenue Service for 2013 and 2016

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Airbnb is under examination by the Internal Revenue Service for its income taxes in 2013 and 2016, according to the company’s December 2020 SEC filing. According to the filing a draft notice of adjustment from the IRS proposes that the company owes an additional $1.35 billion in taxes plus interest and penalties for the years in question. The assessment is related to valuation of its intellectual property that was transferred to a subsidiary in FY 2013. […]

Mining Company Oyu Tolgoi LLC receives a second Tax Assessment from the Mongolian Tax Authority

The Oyu Tolgoi copper-gold mine is a joint venture between Turquoise Hill Resources (which is 50.8 per cent owned by Rio Tinto), and the Mongolian Government. The Mongolian government has not been satisfied by the result of the joint venture and has concerns that increasing development costs of the Oyu Tolgoi project has eroded the economic benefits it anticipated receiving. “It is calculated that Mongolia will not receive dividend payments until 2051 and will incur […]

Diageo – British multinational beverage and alcohol group – is facing various tax challenges

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Diageo (British multinational beverage and alcohol group – owner of numerus brands including Jonny Walker, Captain Morgan, Gordons Gin, Smirnoff and Guinness) is facing difficult tax challenges according to the group’s August 2020 SEC-filings. During 2017 Diageo was in discussions with UK tax authorities to seek clarity on Diageo’s transfer pricing and related issues, and in the first half of the year ending 30 June 2018 a preliminary assessment for diverted profits tax notice was […]

Ørsted in billion dollar transfer pricing dispute with the Danish tax authorities

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Ørsted is a Danish energy group that develops, constructs, and operates offshore and onshore wind farms, solar farms, energy storage facilities, renewable hydrogen and green fuels facilities, and bioenergy plants. According to a company announcement issued in December 2020, Ørsted has received an administrative decision from the Danish Tax Agency requiring Danish taxation of the company’s British offshore wind farms Walney Extension and Hornsea 1 in the tax years 2015 and 2016. The Danish Tax […]

AXA S.A. issued an income assessment of EUR 130 million by the French tax authorities

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Insurance group AXA S.A. is now paying back millions of euros in taxes after French tax authorities found that a Luxembourg-based structure had been used by the group for tax avoidance. According to the French tax authorities AXE S.A. had undeclared taxable profits of at least 130 million in FY 2005 and 2010.    The scheme involved use of a group entity in Luxembourg granting loans to AXA’s foreign subsidiaries. The entity in Luxembourg benefited […]

Allegations of tax avoidance in Dutch Pharma Group Qiagen

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According to investigations by SOMO – an independent center for Research on Multinational Corporations – the annual accounts of Pharma Group Qiagen shows that the group has avoided tax on profits by passing internal loans through an elaborate network of letterbox companies in European tax havens including Ireland, Luxembourg and Malta. It is estimated that, since 2010, the group has avoided at least  €93 million in taxes and has accumulated tax deduction in an amount […]

European Commission vs. Ireland and Apple, September 2020, Appeal of the Judgement of the General Court on the Apple tax State aid case in Ireland

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The European Commission has decided to appeal the decision of the EU General Court in the State Aid case of Apple and Ireland. According to the European Commission Ireland gave illegal tax benefits to Apple worth up to €13 billion, because it allowed Apple to pay substantially less tax than other businesses. In a decision issued july 2020 the General Court held in favor of Apple and Ireland. This decision will now be reviewed by […]

Facebook France has agreed to pay 106 million euros in back taxes and penalties

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The agreement, according to which Facebook France will pay 106 million euros in back taxes and penalties, was reached after French tax authorities had carried out an extensive audit covering FY 2009-2018. Furthermore, Facebook’s French revenues were increased last year after the company decided to include advertising income from French companies in its local accounts, instead of declaring them in Ireland, where Facebook’s international operations are based. As a result, Facebook will pay 8.4 million […]

Korean tax authorities investigates Starbucks’ pricing of coffee beans

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Starbucks Korea is now being investigated for overpricing goods and services imported from abroad. Officials from the National Tax Service have seized accounting records and data held at Starbucks’ Korean head office in Seoul. Subject of the investigation is transfer pricing of coffee beans and others products for sale at its more than 1,370 local shops. In 2019 Starbucks Korea reported sales of over 1.87 trillion won ($1.53 billion) and net profits of 132.8 billion […]

US Investigations into Digital Service Taxes

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Washington, DC – The United States Trade Representative announced today that his office is beginning investigations into digital services taxes that have been adopted or are being considered by a number of our trading partners. The investigations will be conducted under Section 301 of the 1974 Trade Act. This provision gives the USTR broad authority to investigate and respond to a foreign country’s action which may be unfair or discriminatory and negatively affect U.S. Commerce. […]

Mining Group Rio Tinto in new $86 million Dispute with ATO over pricing of Aluminium

In March 2020 the Australian Taxation Office issued an tax assessment regarding transfer pricing to Rio Tinto’s aluminium division according to which additional taxes in an amount of $86.1 million must be paid for fiscal years 2010 – 2016. According to the assessment Rio’s Australian subsidiaries did not charge an arm’s length price for the aluminium they sold to Rio’s Singapore marketing hub. This new aluminum case is separate to Rio’s long-running $447 million dispute […]

Fiat Chrysler reaches a EUR 2.5 billion settelment with the Italien tax authorities

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Fiat Chrysler has reached a settlement with the Italian tax agency over taxable gains related to a transfer of the U.S. Chrysler business from Fiat SpA Italy to Fiat Chrysler Automobiles NV (Netherlands). The Italian tax agency claimed that the value of the U.S. Chrysler business had been underestimated and issued a preliminary assessment with an additional taxable gain of 5.1 billion euros. The agency had valued Chrysler at 12.5 billion euros, while Fiat SpA […]

Google – Taxes and Transfer Pricing

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Google’s tax affairs are back in the spotlight after filings in the Netherlands have showed that billions of dollars were moved to Bermuda in 2016 using the “double Irish Dutch sandwich”. According to the Washington Post, Google’s cash transfers to Bermuda reached $27b in 2016. Google uses the double Irish Dutch sandwich structure to shield the majority of it’s international profits from taxation. The setup involves shifting revenue from one Irish subsidiary to a Dutch […]

Malaysian Energy Group – TENAGA Nasional Bhd – has been issued a RM 4.000.000.000 tax bill by the Revenue Board of Malaysia

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Malaysian Energy Group – TENAGA Nasional Bhd – has begun legal proceedings against the Inland Revenue Board of Malaysia. In November 2019, the Inland Revenue Board issued a tax assessment  according to which taxes of RM3.98 bil (or USD 1 billion) is owed for years 2015-2017. After reciving the assessment, TENAGA responded “Based on the legal advice obtained from our tax solicitors, TNB has a good basis to contend that there is no legal and factual […]

Microsoft – Taxes and Transfer Pricing

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Microsoft’s tax affairs have been in the spotlight of tax authorities all over the World during the last decade. Why? The setup used by Microsoft involves shifting profits from sales in the US, Europe and Asia to regional operating centers placed in low tax jurisdictions (Bermuda, Luxembourg, Ireland, Singapore and Puerto Rico). The following text has been provided by Microsoft in a US filing concerning effective tax and global allocation of income: “Our effective tax rate for […]

Netflix under investigation for alleged tax evasion in Italy

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Public prosecutors in Italy have opened a preliminary probe into the taxation of Netflix on the basis that servers and cables constitute a digital infrastructure that makes revenues taxable under Italian law. Italian media, Corriere della Sera, says that the prosecutors are working with Italy’s fiscal police to determine whether revenues from Netflix’s estimated 1.4 million Italian subscribers are subject to Italian taxation, even though Netflix operates out of the Netherlands. Italian prosecutors have recently […]

British American Tobacco hit by £902 million tax assessments in the Netherlands

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According to the 2018 financial statement, British American Tobacco group has been hit by a £902 million tax assessments in the Netherlands. “The Dutch tax authority has issued a number of assessments on various issues across the years 2003-2016 in relation to various intra-group transactions. The assessments amount to an  aggregate net liability across these periods of £902 million covering tax, interest and penalties. The Group has appealed against the assessments in full. The Group believes that […]

The L’Oréal group announced additional payment of 320 million euros in corporate tax to the French tax authorities to “settle a dispute”

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The French cosmetic group L’Oréal announced in September 2019 that it would pay 320 million euros to the French tax authorities to “settle a dispute” related to the payment of corporate tax for three of its subsidiaries for fiscal years 2014 and 2018. In detail, the charge was 47 million euros for Lancôme Parfums et Beauté, 115 million euros for Active International Cosmetics and 158 million euros for Prestige and Collections International.

Telenor will have to pay additional taxes of 2.5 billion Norwegian crowns

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Telenor Norway has received a tax assessment according to which the company will have to pay additional taxes in Norway of 2.5 billion Norwegian crowns for tax year 2013. A deduction expenced in 2013 for a loss suffered in 2012 due to settlement of bank guarantees given in respect of external funding in its Indian subsidiary Unitech Wireless has been disallowed for tax purposes by the Norwegian Tax Authorities Telenor decided to enter the market […]

The Australian Taxation Office and Mining Giant BHP have settled yet another Transfer Pricing Dispute

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BHP Group has agreed to pay the state of Western Australia A$250 million to end a dispute over royalties paid on iron ore shipments sold through its Singapore marketing hub. The State government found in January that the world’s biggest miner had underpaid royalties on iron ore shipments sold via Singapore stretching back over more than a decade. BHP reached a deal to pay A$529 million in additional taxes to the Australian government late last […]

Czech Republic Issues new 2019 Local Transfer Pricing Instructions GFR D-34

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May 2019 the Czech Republic issued new local transfer pricing instructions D-34. These new instruction replaces the 2011 Instruction D-334.  Simultaneously with the new instruction, the Czech translation of the OECD Guidelines on Transfer Pricing for Multinational Enterprises and Tax Administrations, as amended in the 2017 version, was also published in the Financial Bulletin of the Ministry of Finance No. 5/2019. Click here for unofficial English Translation Click here for translation

Perrigo facing billion dollar tax assessments in both Ireland and the US

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In July 2013 the Irish pharma company Elan was acquired by the US based Perrigo group for $8.6 billion (£5.6 billion). Ireland’s corporation tax rate was one of the main attractions for Perrigo and the deal was said to give Perrigo substantial tax savings due to a corporate tax inversion. The Irish 12.5 % corporate tax rate compared US rate of 30 % was further augmented by the trading losses built up over a number of […]

The Kering Group – owner of Gucci, Bottega Veneta, Saint Laurent and Pomellato – has settled an Italian Tax Case for an Amount of 1.250 Billion Euro

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The Kering group – owner of Gucci, Bottega Veneta, Saint Laurent and Pomellato –  has settled a case with the Italian tax agency for an amount of euro 1.250 billion in taxes and penalties relating to fiscal years 2011-2017. The case was started by the Italian tax police in 2017 and resulted in a recommendation to charge the president and chief executive officer of the Italian company Guccio Gucci S.p.A. with the crimes of tax […]

Facebook in billion dollar dispute with the IRS related to transfers of intangibles to Ireland

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In the annual report for 2018 Facebook Inc. has included the following statement on current tax disputes with the IRS. “…The tax laws applicable to our business, including the laws of the United States and other jurisdictions, are subject to interpretation and certain jurisdictions are aggressively interpreting their laws in new ways in an effort to raise additional tax revenue from companies such as Facebook. The taxing authorities of the jurisdictions in which we operate […]

Western Digital in $549 million transfer pricing dispute with the IRS

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Western Digital has been issued a $549 million tax assessment for fiscal years 2008 – 2012 by the IRS relating to transfer pricing with the Company’s foreign subsidiaries and intercompany payable balances. In the Annual Report for 2018 the following is stated by Western Digital on the case: “The Internal Revenue Service (“IRS”) previously completed its field examination of the Company’s federal income tax returns for fiscal years 2008 through 2012 and proposed certain adjustments. […]

The Australian Taxation Office and Bupa Health Insurance reaches $157m settlement after decade-long dispute

Bupa reaches $157m settlement with the Australian tax office after decade-long dispute The settlement was the result of a decade-long dispute with the ATO over a “number of different matters”, included transfer pricing issues with acquisitions in Australia in 2007 and 2008. Bupa’s tax affairs came under scrutiny last year in a report by the Tax Justice Network. The report alleged that Bupa frequently used related party loans and debts from a corporate restructure, among […]

Glencore in $680 million Transfer Pricing Dispute with HMRC

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In a publication of preliminary results for 2018 mining giant Glencore reports a major tax assessment issued by HMRC in December 2018. “UK Tax Audit In December 2018, HMRC issued formal transfer pricing, permanent establishment and diverted profits tax assessments for the 2008 – 2017 tax years, amounting to $680 million. The Group intends to appeal and vigorously contest these assessments, following, over the years, various legal opinions received and detailed analysis conducted, supporting its […]

France vs. Apple, Feb. 2019, Settlement on Payment of 571 million Euros in Back Taxes

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Apple has agreed to paid an additional 571 million euros to France in a settlement with the tax authorities. According to the French news agency, l’expansion l’Express – “For several months now, secret negotiations on this subject have been taking place between Apple and the French International Audit Department (DVNI). But it is not until the end of December 2018 that a confidential agreement was reached. The subject of the negotiations has been the limited […]

Flir Systems Inc in SEK 2.8 billion transfer pricing dispute with Swedish Tax Authorities.

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Flir Systems Inc, a global leader in infrared Cameras, is involved in a SEK 2.8 billion transfer pricing dispute with the Swedish Tax Authorities. In a recent 10Q filings Flir Systems Inc. provides information on the dispute: “…the United States Internal Revenue Service (“IRS”) and other tax authorities regularly examine our income tax returns. Our financial condition and results of operations could be adversely impacted if any assessments resulting from the examination of our income […]

Blizzard Gaming involved in major Tranfer Pricing disputes

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US Gaming Giant, Activision Blizzard Inc. – known for games such as World of Warcraft and Diablo – is and has been involved in several major transfer pricing disputes – with the US, French, UK, and Swedish tax authorities. In a 10Q filing with the US Securities and Exchange Commission from November 2018 the following information was provided by the company on pending tax cases. “Activision Blizzard’s 2009 through 2016 tax years remain open to […]

Wheaton Precious Metals Reaches Settlement on Canadian Tax Dispute Regarding Foreign Income

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Wheaton Precious Metals Corp. has reached a settlement with the Canada Revenue Agency which provides for a final resolution of Wheaton’s tax appeal in connection with the reassessment under transfer pricing rules of the 2005 to 2010 taxation years related to income generated by the Company’s wholly-owned foreign subsidiaries, Wheaton International, outside of Canada. Wheaton is the leading company in the precious metals streaming business, essentially providing up-front financing to mining companies looking to build […]

Analog Devices hit by $52m tax demand in Ireland

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Analog Devices has been issued a $52m tax demand from the Revenue Commissioners in Ireland. The assessment is related to inter-company transfers back in 2013, where – according to the tax authorities – the Irish entity has failed to conform to OECD transfer pricing guidelines. Analog Devices specialises in data converters and chips that translate a button press or sound – into electronic signals. The company was established in Ireland in 1977, where today about 1,200 […]

The Australian Taxation Office and Mining Giant BHP have settled an ongoing Transfer Pricing Dispute

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The Australian Taxation Office has agreed on a settlement with BHP Mining Group to resolve a transfer pricing dispute relating to transfer pricing treatment of commodities sold to a Singapore marketing hub. BHP had originally been assessed with over AUD 1 billion in additional taxes. According to the settlement BHP will pay additional tax of AUD 529 million to resolve the dispute, covering the years 2003–18. According to the settlement BHP Group will also increase […]

Transfer Pricing in the Mining Industry

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Like other sectors of the economy, there are base erosion and profit shifting risks in the mining sector. Based on the ongoing work on BEPS, the IGF (Intergovernmental Forum on Mining) and OECD has released guidance for source countries on transfer pricing in the mining sector. The transfer pricing and tax avoidance issues identified in the sector are: 1. Excessive Interest Deductions Companies may use related-party debt to shift profit offshore via excessive interest payments […]

Major US MNE’s in Ireland

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Major US MNE’s with regional Headquarters in Ireland for European business activities. The corporation tax rate in Ireland is only 12.5%. However to further sweeten the deal for MNE’s, Ireland has been known to offer special tax deals to MNE’s resulting in much lower effective tax rates. Ireland provides MNEs with both low tax centers for European activities and conduit holding companies serving as hubs for transferring profits and capital to low tax jurisdictions such […]

New Zealand introduces Group Rating Approach for certain Cross-Border relatet party Borrowing and Debt Arrangements

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The OECD’s final report on interest limitation rules notes that thin capitalisation rules are vulnerable to loans with excessive interest rates and many transfer pricing practicioneres finds that transfer pricing may not the most effective way to prevent profit-shifting using high-priced related party debt. Related-party transactions are fundamentally different to third-party transactions. Factors that increase the riskiness of a loan between unrelated-parties (such as whether the debt can be converted into shares or the total […]

US vs Boston Scientific, June 2018, IRS and Boston Scientific finalize a $608m settlement

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Boston Scientific and the U.S. Internal Revenue Service have finalized a settlement of $610 million in taxes and interest dating back to the $26 billion acquisition of Guidant in 2006. Boston will pay $303 million in taxes and $305 million in interest to the IRS within the next three months. In 2016, Boston Scientific agreed to pay the IRS $275 million plus interest in a dispute over transfer pricing, plus charges related to a 2006 […]

Apple – Taxes and Transfer Pricing

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Apple’s tax affairs have been in the spotlight of tax authorities for decades – and still are! Settlements have been entered with numerous European Countries, among others – Italy, the UK and France. Apple has also been investigated by the EU and a State Aid ruling was issued in August 2016. According to the ruling “Ireland granted illegal tax benefits to Apple” and the European Commission ordered Apple to pay €13 billion, plus interest, in […]

Nokia paid 202 million euro to settle a long running dispute with the tax authorities in India

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Under the Mutual Agreement Procedure (MAP), Finland and India have settled a long running tax dispute involving Nokia. The tax authorities in India issued a tax assessment to Nokia for violating withholding tax regulations in India while making royalty payments to its parent company in Finland. An additional assessment was then issued by the tax authorities in India to the parent company in Finland for the same transaction as – according to the tax authorities […]

Amazon has settled a 200 million Euro tax dispute with France

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The dispute between Amazon and the French tax authorities relates to transfer pricing in fiscal years 2006 to 2010. Amazon has been accused of tax avoidance in the EU by channeling all local sales through Luxembourg. This set up has been changed in France, where Amazon in 2015 established a branch where all retail sales, charges and profits in France are booked. In October 2017 the EU commission decided that Luxembourg’s arrangement with Amazon is […]

UK vs. Apple, Jan. 2018, Payment of £136 million

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Apple has paid an additional £136m taxes in a settlement with the UK. The settlement is revealed in Apple Europe’s 2017 accounts. “Following an extensive audit by Her Majesty’s Revenue and Customs (HMRC) the Company agreed to pay a corporate income tax adjustment of £136m covering prior years up to September 26, 2015. This payment of additional tax and interest reflects the Company’s increased activity and is recognized in the current financial period which ended […]

Africa – Mining and Transfer Pricing

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Most Sub Saharan African jurisdictions see the area of mineral transfers/sales as the main transfer pricing risk, but only few have systems in place to check if prices applied to minerals transferred to related parties comply with the arm’s length principle. Studies highlights a strong need for capacity strengthening in the area of transfer pricing throughout the African continent and for enhancing the knowledge of mining industry within tax authorities. South Africa has, for many years, been the leader […]

Disneyland Paris under tax investigation

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French Tax Officials raided Disney’s Paris Office. The tax investigation focuses on a fee that Disneyland Paris paid for use of Disney’s intellectual property. The same payment appeared to be associated with services provided by a U.K. unit tasked with managing “Disney activities in Europe, the Middle East and Africa since 2011,”. The problem, in this case, is that the company’s decision to combine the two costs made it impossible for tax officials to confirm […]

Canada vs Cameco, November 2017, Pending case – C$2.2bn in taxes

Several mining companies are beeing audited by the Canadian Revenue Agency for aggressive tax planning and tax evasion schemes. Among the high-profile companies that have filed pleadings with the Canadian Tax Court are Cameco, Silver Wheaton, Burlington Resources, Conoco Funding Company and Suncor Energy. The CRA says, the companies inappropriately ran international transactions through subsidiary companies in low-tax foreign jurisdictions. In the Cameco case the Revenue Agency has audited years 2003 to 2015 and challenged […]

Canada vs. AGF Management Ltd, Nov. 2017, Dispute settlement $71.9-million in back taxes

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Mutual-fund seller AGF Management Ltd. has settled a federal tax case over income shifted from Canada to an overseas subsidiary. The company has recently disclosed that the Canada Revenue Agency sought a total of $71.9-million in back taxes, interest and penalties related to the period spanning 2005-10. An agreement has since been reached, but the terms were not disclosed. In its latest quarterly report, AGF said the disagreement over taxes owed relates to transfer pricing […]

South Africa vs. Kumba Iron Ore, 2017, Settlement 2.5bn

A transfer pricing dispute between South African Revenue Service and Sishen Iron Ore, a subsidiary of Kumba Iron Ore, has now been resolved in a settlement of ZAR 2.5bn. The case concerned disallowance of sales commissions paid to offshore sales and marketing subsidiaries in Amsterdam, Luxembourg and Hong Kong. Since 2012, Kumba Iron Ore’s international marketing has been integrated with the larger Anglo American group’s Singapore-based marketing hub. The settlement follows a similar investigations into […]

South Africa vs. Sasol, Oct. 2017, $878 million tax case

A tax dispute over a potential 11.6 billion rand ($878 million) charge between South Africa -based international chemicals and energy company Sasol and the Revenue Service will play out in South Africa’s Supreme Court of Appeal within the next 12 months. June 30. 2017 a R1.2-billion tax liability was approved by the Tax Court in a case against Sasol by SARS relating to the company’s international crude oil procurement activities between 2005 and 2012. The […]

German royalty barrier to counter IP box-regimes

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Some countries in Europe offer so-called IP or Patent boxes. To counter such tax practices, effective from 31 December 2017, Germany has introduced a new royalty barrier in ‘Law against Harmful Tax Practices in Connection with the Assignment of Rights. The law limits tax deductibility of expenses for the assignment of rights in order to prevent royalty income from not being taxed or taxed at a low rate and taxes income in the country where […]

US vs. Cameco, July 2017, Settlement of $122th.

Canadian mining company, Cameco Corp, has settled a tax dispute and will pay the IRS $122,000 for income years 2009-2012. Cameco’s dispute with tax authorities relates to its offshore marketing structure and transfer pricing. Cameco sells uranium to its marketing subsidiary in Switzerland, which re-sells it to buyers, incurring less tax than the company would through its Canadian office. Cameco says it has a marketing subsidiary in Switzerland because most customers are located outside Canada.

Google paid 306 million Euro in an Italian tax settlement

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Google has agreed to pay 306 million Euro to the Italian authorities in a transfer pricing dispute related to years 2009 – 2013. The dispute was one of several initiated due to the billions of dollars in sales to European consumers and Googles lack of tax payments in Europe. Google has already settled with the UK, paying 130 million in back taxes in 2016 to end an long lasting audit. Other disputes still remain elsewhere […]

Australia vs Rio Tinto and BHP Billiton, April 2017 – Going to Court

Singapore marketing hubs are being used by large multinational companies — and billions of dollars in related-party transactions that are being funnelled through the hubs each year. The Australian Tax Office has issued claims of substantial unpaid taxes to mining giants Rio Tinto and BHP Billiton. BHP Billiton and Rio Tinto have revealed through the Senate inquiry they have been issued amended assessments for tax, interest and penalties of $522 million and $107 million respectively. […]

Accenture settles Swiss tax claim for $200m

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The Accenture settlement with the Swiss tax authorities results from a significant discrepancy in the valuation of intangibles in a 2010 inter-company transfer from Switzerland to Ireland via Luxembourg that was disclosed in 2014 as a result of Lux Leaks. The Lux Leaks documents show that in the 48 hours it took to complete the inter-company transfer, the value of the intangibles had increased by almost 600 percent from $1.2 billion to $7 billion. In […]

Developments in Canada – Tax Controversy and Settlements

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Developments in Canada In January 2016, the Federal Court of Appeal affirmed the decision of the Tax Court of Canada in Marzen Artistic Aluminum Ltd. v. The Queen, 2016 FCA 34, upholding most of the CRA’s transfer pricing adjustments and the imposition of transfer pricing penalties. The case, however, provided little insight into the meaning of “reasonable efforts” in the context of transfer pricing documentation, given that the taxpayer did not prepare contemporaneous documentation. The […]

IRS vs Boston Scientific and Guidant, Settlement of $1billion dispute

Just days before trial, Boston Scientific Corp. has agreed to pay the Internal Revenue Service $275 million plus interest to settle more than $1 billion in disputed taxes dating back more than a decade. Boston Scientific has long disputed the IRS’ assertions that the company and its Guidant subsidiary have underpaid corporate taxes by as much as $1.16 billion. The dispute centers on “transfer pricing” and the amount of taxes owed to the United States […]

Italy vs. Apple, December 2015, Settlement on Payment of 347 million Dollars in Back Taxes

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Apple has agreed to paid an additional 347 million dollars to Italy in a settlement with the tax authorities. A spokesperson for the Italian tax office says that Apple is paying the sum to end the investigation, and that it is in line with what the agency had asked for — although substantially less than the €880 million Apple has been accused of withholding for sales booked in Italy. A similar agreement has later been […]

Canada vs Daimler AG, March 2011, $ 2.2bn

According to a U.S. regulatory filing, Daimler AG has paid the federal, Ontario and Alberta governments more than $700 million after accepting a settlement in June, 2010. Daimler further expects to pay the remainder of a $1.5-billion extra tax bill this year to settle a long-standing dispute over how its former partner, Chrysler, accounted for auto and parts shipments across the Canada-U.S. border. The tax case is about transfer pricing, or how Chrysler accounted for […]

German Guidance on Business Restructuring and Valuation issued in October 2010

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In 2008 German legislation on business restructurings was updated to align with the new chapter XI in the OECD Transfer Pricing Guidelines. § 1 para. 3 AStG and the “Regulation on the application of the arm’s length principle according to §1 para. 1 AStG in cases of cross-border relocation of functions” of 12.8.2008 (Function Relocation Regulation, in short: FVerlV). Guidance was subsequently issued by the tax authorities in BMF letter of 13 October 2010, IV […]

New Zealand vs Australian-owned banks – ANZ, ASB, BNZ and Westpac

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In 2009, New Zealand’s tax authorities made an out of court tax settlement of $2.2 billion. Australian-owned banks – ANZ, ASB, BNZ, and Westpac – agreed to recognise a extra tax bill of $2.2 billion between them, they avoided via deliberately complicated structured financial transactions. The Four banks entered the settlement after two of them had been to court and lost. Westpac Banking Corporation v Commissioner of Inland Revenue, Feb 2009 BNZ Investments Ltd v […]