Category: Losses that continue indefinitely
When an associated enterprise consistently realizes losses while the MNE group as a whole is profitable, the facts could trigger some special scrutiny of transfer pricing issues. Of course, associated enterprises, like independent enterprises, can sustain genuine losses, whether due to heavy start-up costs, unfavourable economic conditions, inefficiencies, or other legitimate business reasons. However, an independent enterprise would not be prepared to tolerate losses that continue indefinitely. An independent enterprise that experiences recurring losses will eventually cease to undertake business on such terms. In contrast, an associated enterprise that realizes losses may remain in business if the business is beneficial to the MNE group as a whole. See TPG2017, Para 1.129, 1.130 and 1.131.

Czech Republic vs Aisan Industry Czech, s.r.o., April 2022, Supreme Administrative Court, Case No 7 Afs 398/2019 – 49

France vs ST Dupont , April 2022, CAA of Paris, No 19PA01644

Denmark vs Maersk Oil and Gas A/S, March 2022, Regional Court, Case No BS-41574/2018 and BS-41577/2018

France vs (SAS) RKS, October 2021, Conseil d’Etat, Case No. 443130

France vs SARL Elie Saab France, June 2021, Conseil d’État, Case No 433985

Denmark vs Tetra Pak Processing Systems A/S, April 2021, Supreme Court, Case No BS-19502/2020-HJR

Norway vs “Distributor A AS”, March 2021, Tax Board, Case No 01-NS 131/2017

Romania vs “GAS distributor” SC A, December 2020, Court of Appeal, Case No 238/12.03.2020

Romania vs “Electrolux” A. SA, November 2020, Supreme Court, Case No 6059/2020

Poland vs Cans Corp Sp z.o.o., August 2020, Administrative Court, I SA/Sz 115/20

Greece vs “G Pharma Ltd”, july 2020, Court, Case No 1582

Denmark vs. Adecco A/S, June 2020, Supreme Court, Case No SKM2020.303.HR

France vs SAS RKS (AB SKF Sweden) , June 2020, CAA of VERSAILLES, Case No. 18VE02848

Denmark vs Icemachine Manufacturer A/S, June 2020, National Court, Case No SKM2020.224.VLR

Finland vs A Oy, April 2020, Supreme Administrative Court, Case No. KHO:2020:34

Czech Republic vs. Eli Lilly ÄŒR, s.r.o., December 2019, District Court of Praque, No. 6 Afs 90/2016 – 62

Czech Republic vs Aisan Industry Czech, s.r.o., October 2019, Regional Court, Case No 15 Af 105/2015

Denmark vs Adecco A/S, Oct 2019, High Court, Case No SKM2019.537.OLR

Switzerland vs “Trust Administrator A. SA”, September 2019, Federal Supreme Court, Case No 2C_343/2019
