The transaction involved Coffee Exporters Limited, a Tanzanian company which, between 2009 and 2011, received cash advances from Taggart S.A., a Swiss company, to facilitate coffee procurement. The company treated the advances as liabilities rather than sales income unless coffee was delivered. The tax authorities accepted that Coffee Exporters Limited was neither a domestic nor a foreign permanent establishment, and that the advances were not taxable sales. However, they treated the dealings as controlled transactions, determining that the parties were associates under section 3(d) of the Tanzanian Income Tax Act. They also applied transfer pricing adjustments under section 33(2) and disallowed foreign exchange losses. Coffee Exporters Limited challenged the assessments before the Tax Revenue Appeals Board and the Tribunal, arguing that there was no associate relationship between the parties, that OECD concepts should apply and that the disallowance of foreign exchange losses was incorrect. Coffee ... Continue to full case

The transaction concerned intra-group transactions carried out by a Greek company whose main activity was the wholesale of motor vehicles. In addition to wholesale activities, the company also engaged in retail sales of vehicles and parts, as well as providing limited repair services. For the 2010 and 2011 financial years, the company documented its transfer pricing using a TNMM and a set of comparable companies, declaring losses for 2010 which were carried forward to 2011. The tax authorities rejected parts of the transfer pricing documentation, excluded comparable companies that carried out both wholesale and retail activities, and adjusted the results to the median of the arm’s length range. Based on this, they converted the declared loss for 2010 into taxable profits, disallowed the loss carry forward to 2011 and imposed additional income tax and penalties. The company challenged these decisions in the Administrative Court of ... Continue to full case

The case concerned 3M’s 2006 tax return and whether additional royalty income should be attributed to 3M from its Brazilian subsidiary, despite Brazilian legislation capping the amount of royalties that could be paid to a foreign controlling company. The IRS issued an assessment reallocating approximately 23.7 million dollars in unpaid royalties, on the basis that an unrelated licensee would have paid that amount for 3M’s intellectual property. 3M challenged the adjustment in the Tax Court and lost. An appeal was then filed by 3M with the Court of Appeal. Judgment The Court of Appeal reversed the decision of the tax court and rejected the reallocation of unpaid royalties that Brazilian law prevented 3M Brasil from paying. The court held that section 482 [US’ Transfer Pricing regulations] does not permit the attribution of income that the taxpayer could not legally receive. The court rejected the idea ... Continue to full case

For the years 2008 to 2016, Tobacco BV was issued multiple tax assessments with significant corrections to the taxable amounts it had declared. In addition, the tax authorities had imposed penalties for misconduct for the years 2010 and 2012 to 2016. For all years, it was disputed whether various fees charged by other group companies for supplies and services to Tobacco BV had been at arm’s length. For 2016, an additional issue arose as to whether the termination of licence rights operated by a subsidiary should be regarded as an unbusinesslike withdrawal from the company’s assets. One of the transfer pricing adjustments concerned the factoring costs charged to Tobacco BV by a group company. The Court ruled that these costs were largely unbusinesslike and that the company had not refuted the presumption under Section 8b of the 1969 Corporation Tax Act, namely that the disadvantage ... Continue to full case

PJSC Vinnytsia Oil and Fat Plant’s sold oil from oilseeds (sunflower, rapeseed, soybean) to a British Virgin Islands affiliate during 2015 to 2017, which the tax authorities audited for transfer pricing and then assessed additional corporate income tax of about 37.6 million UAH based on the CUP method. On appeal, the court found that the tax authority’s CUP analysis relied on data that were not shown to be publicly available for the audited years and whose methodology became available only later, so the sources could not support a reliable like-for-like comparison. It also held that for forward contracts in 2015 and 2016 the correct comparison date is the contract date, not the delivery date, making the authority’s price comparisons improper. Because the authority did not request additional transfer pricing information within 30 days of receiving the taxpayer’s TP documentation, that documentation was deemed complete and ... Continue to full case

The transaction concerned management services provided by CCB Management Services GmbH & Co KG, an Austrian group company, to Coca-Cola HBC under a long-term management services agreement in 2004. Coca-Cola HBC deducted the invoiced management fees as tax expenses and reported a tax loss for the 2004 corporate income tax period. However, the tax authorities concluded that a substantial portion of the management service costs were not tax-deductible. They treated the Austrian service provider as a related party, ruling that the pricing and allocation of services did not comply with the arm’s length principle under the Income Tax Act and Article 9 of the Austria-Slovakia tax treaty. Based on this, they made transfer pricing adjustment, increased the tax base and reduced the reported tax loss. They also took the view that applying the tax treaty allowed a longer limitation period for assessing tax. Coca-Cola HBC ... Continue to full case

The transaction in question involved intra-group transactions carried out in 2011 by FCA Greece S.A., a Greek company specialising in the import and sale of passenger cars, light commercial vehicles and spare parts. The company documented its transfer pricing using a TNMM and a set of comparables, reporting a significant tax loss for the year. The tax authorities rejected the transfer pricing documentation, excluded certain comparables and adjusted the results to the median of the interquartile range. Based on this, they made a transfer pricing adjustment of €6,535,444.21, which substantially reduced the declared loss and resulted in a corrective income tax assessment being issued. The company challenged this before the Administrative Court of Appeal, arguing that the adjustment to the median of the interquartile range was unlawful and that minor deviations from the arm’s length range should not trigger an adjustment. The company also argued ... Continue to full case

Piaggio S.A. was a Greek wholesaler of motorcycles, mopeds, parts, and accessories. In 2008, the company generated gross revenue of €63.63 million and net profit of €878,666, while purchases from related parties, such as Piaggio and Moto Guzzi, totalled €57.99 million. In order to support the pricing of its controlled transactions, the company filed a benchmark study with eight foreign comparables and a tested operating margin of 1.78 per cent, which it claimed fell within an interquartile range of 0.92 to 3.96 per cent. Following an audit, the tax authorities removed two comparables for being uncomparable in size, recalculating the range to 0.78–7.16 per cent, with the first quartile at 1.81 per cent and the median at 3.81 per cent. They then raised the income by moving the tested result to the median and added a penalty for non-compliance. Piaggio S.A. filed an appeal, which ... Continue to full case

Rwenzori Commodities Limited’s challenge to the Uganda Revenue Authority’s application of the interest deductibility limitation in section 25(3) of the Income Tax Act. The Revenue Authority had capped the company’s deductible interest expense at 30% of EBITDA using gross interest, without offsetting interest income. They argued that the statute refers only to gross interest expense, that OECD guidance is not binding in Uganda, and that Parliament intentionally did not adopt a net interest rule in the 2018 amendments. The taxpayer argued that the law should be interpreted to use net interest (interest expense minus interest income), citing GAAP principles and OECD BEPS Action 4 guidance, which aim to prevent double taxation and better reflect the real cost of borrowing. Judgment of the Tax Appeals Tribunal The Tribunal upheld URA’s position that section 25(3) of the Income Tax Act requires the 30% EBITDA cap to be applied ... Continue to full case

SK Rental SAS had filed an appeal against the tax authorities’ transfer pricing adjustment of its 2016 income tax return. The taxpayer argued that the tax authorities’ assessment were irregular and disregarded transfer pricing operations relating to the acquisition of depreciable fixed assets. Along with its claim, the company requested that an expert opinion prepared by Deloitte and a technical analysis by Crowe Co SAS on transfer pricing for 2016 be admitted as evidence. The Administrative Court accepted the documentary evidence and administrative records, but rejected the expert and technical analyses. SK Rental SAS appealed this decision. Judgment The Supreme Administrative revoked the lower court’s order denying the expert and technical evidence and instead decreed their admission. The Court held that, in tax litigation, the valuation of evidence must adhere to the principles of relevancy, pertinency and usefulness. The Court emphasised that expert reports and ... Continue to full case

The case concerned an application for annulment brought by the American Free Enterprise Chamber of Commerce, a US-based non-profit organisation, against Articles 35 and 36 of the Belgian law introduced on 19 December 2023, which set out the details of a minimum tax for multinational companies and large domestic groups. Several other US chambers of commerce intervened in support of the applicant, while the Belgian Council of Ministers defended the law. The applicants argued that the provisions breached constitutional principles, including those of equality, non-discrimination and the protection of property, and that the minimum tax conflicted with international obligations. They also asked the Constitutional Court to refer the matter to the Court of Justice of the European Union for a preliminary ruling on the validity of the Directive itself. They claimed that the directive was incompatible with the Charter of Fundamental Rights of the European ... Continue to full case

The case concerns a Panamanian insurance company that ceded excess loss reinsurance premiums to a related party abroad in 2018. Following a transfer pricing audit the tax authorities rejected the profit level indicator (PLI) and external comparable used in the Insurance SA’s study, replaced it with operating margin as the PLI, recalculated the arm’s length margin excluding other operating income, and issued an additional assessment of B/.30,626.06 in income tax and B/.3,675.13 in supplementary tax, plus surcharges. Insurance SA argued in reconsideration and appeal that it had followed domestic rules and the OECD Guidelines, that its chosen PLI was appropriate for an insurance business with significant marketing and sales expenses, and that the tax authorities’ rejection of its key comparable based on alleged branch opening costs in 2016 was speculative and unsupported by the financial statements. It also claimed that its segmented analysis of premiums ... Continue to full case

These two cases both concern the legal basis for transfer pricing assessments issued by the tax authorities regarding the arm’s length price of goods sold by Domori to Agriland. The Regional Tax Commission set aside the assessments on appeal on the basis that the parties were not controlled under the Italian arm’s length provisions inacted at the time of the transactions in question. The tax authorities filed an appeal with the Supreme Court. Judgment The Supreme Court dismissed the tax authorities’ appeal and upheld the lower courts’ decisions. Excerpts in English 18072/2025 “[…] That said, according to the trial judge, the relationship of dominant influence within the meaning of Article 2359 of the Civil Code would be expressed in the power of one person over another to “guarantee the exercise of managerial and strategic influence over the overall business activity”; therefore, rather on the basis ... Continue to full case

The tax authorities issued an assessment against Prysmian s.p.a. for 2012, raising two adjustments: one for over €13 million relating to income attributable to its Singapore subsidiary, Draka Cableteq Asia Pacific Holding, under Italy’s CFC rules, and another for over €1 million relating to transfer pricing. However, on appeal the Provincial Tax Commission annulled the latter adjustment because the disputed transactions were purely domestic, taking place between Prysmian s.p.a. and its Italian subsidiary PCS. Therefore, they were not subject to italian transfer pricing rules. However, the Commission upheld the CFC adjustment. On appeal, the Regional Tax Commission reversed this decision, fully confirming the original assessment. It held that services invoiced by Prysmian to PCS were merely passed on by PCS to foreign subsidiaries, rendering PCS a passive conduit. The Regional Tax Commission did not explicitly rule on the cross-appeal filed by Prysmian against the CFC ... Continue to full case

In these three combined cases, the tax authorities had increased “A-TM Licensor Sp. z o. o.”’s tax base by disallowing some of the royalty payments made to related parties for the “A” trademark, deeming them excessive. They reclassified the licensing agreements with the related party as service contracts for trademark administration and applied the transactional net margin method. “A-TM Licensor Sp. z o. o.” argued that the decision was unlawful and that the claim was time-barred. They also claimed that the regulation on transfer pricing methods lacked a proper statutory basis. The first-instance court dismissed the complaint, agreeing with the tax authorities that the transactions with related parties did not reflect arm’s length conditions, that the licensees only performed formal legal functions and that “A-TM Licensor Sp. z o. o.” remained the economic owner of the trademark. The court also held that the suspension of ... Continue to full case

The transaction involved L. Sp. z o.o., a Polish operating company belonging to the L. Capital Group, and related group entities that successively became the formal legal owners of the ‘L.’ trademark following a series of steps within the group in 2014. These steps included a contribution in kind of the trademark, its sale, the subsequent transformation of the acquiring company into a partnership and its subsequent liquidation. From September 2015 to August 2016, L. sp. z o.o. paid licence fees to the related entity B. sp. z o.o. sp.j. for use of the trademark, deducting these fees as tax-deductible costs. The tax authorities took the position that the licence fees did not reflect arm’s length conditions within the meaning of Article 11 of the Corporate Income Tax Act, as it was in force at the time. Based on a functional analysis, the authorities concluded ... Continue to full case

“Supermarket BV” is a company in the Netherlands. It conducts some of its business through a permanent establishment (PE) in Belgium. In 1999, the company formed a reinvestment reserve from the proceeds of selling a leasehold interest in a Dutch supermarket. In 2003, the company used this reserve to acquire the right to use a dwelling located in Belgium, which was included in the assets of its Belgian PE. From 2004 to 2013, “Supermarket BV” incorrectly calculated depreciation relating to the Belgian asset by using a lower initial book value due to the inappropriate deduction of the reinvestment reserve. Consequently, the exempt profits attributable to the Belgian PE were overstated, resulting in excessive exemption from Dutch taxation. In 2013, the tax authorities detected the error and corrected it by adjusting the taxable profit for that year, applying the ‘error correction doctrine’ and making a one-time ... Continue to full case

The Finance Court had denied a timber trading group’s deduction of €4 million paid by one group company to a sister partnership as compensation for sawmill construction defects. The Finance Court had refused the deduction because no written agreement existed between the related parties, without assessing all relevant circumstances under the arm’s length principle. Judgment of the Federal Constitutional Court The Federal Constitutional Court annulled a judgment of the Finance Court. The Court found the approach of the Finance Court arbitrary and contrary to Article 3(1) of the Basic Law, as written form cannot be treated as an independent legal requirement. The case was sent back to the Finance Court for a full assessment, while other parts of the complaint were dismissed as inadmissible. Excerpts in English “(1) As the appellants have correctly pointed out, the Finance Court 50, contrary to the decision of the ... Continue to full case

Gruppo Illy and its subsidiary Domori received a tax assessment in which the tax authorities had adjusted the pricing of goods sold by Domori to Agriland under application of the Italian arm’s length provision. During the relevant period, Domori had incurred losses. According to the tax authorities, two Agriland directors were also Illy Group directors, and on this basis, the tax authorities held that the transactions were controlled under the definition found in Article 110 of the TUIR (the Italian arm’s length provision). Illy and Domori contested the assessment by filing an appeal, as Agriland was neither part of the group nor otherwise controlled by them. The Provincial Tax Commission cancelled the assessment, a decision which was later upheld by the Regional Court. An appeal was then filed with the Supreme Court. Judgment The Supreme Court upheld the Regional Court’s decision and set aside the ... Continue to full case

“Drilling LDA” had paid approximately €3.95 million in management fees to a related Maltese group company in 2014, under a management services agreement covering administrative, financial, legal and operational support connected with an offshore drilling platform. Following a tax audit, the Tax Authority disallowed tax deductions for the management fees, citing the Portugeese indispensability test for tax deduction of costs, an alleged lack of substance and simulation, and references to transfer pricing. “Drilling LDA” challenged the assessment in the Administrative Court, which overturned the decision. The Tax Authority appealed against this decision to the Central Administrative Court. Judgment The Central Administrative Court dismissed the appeal and confirmed the annulment. The Court held that, once a related-party relationship had been acknowledged, the Tax Authority could not deny deductibility under the indispensability test without properly applying the transfer pricing rules or the anti-abuse regime. As the Administration ... Continue to full case