Court result: Decision predominantly in favor of taxpayer

France vs SAP France, September 2022, Conseil d’État, Case No. 461639

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SAP AG (now SAP SE) is a German multinational software corporation that develops enterprise software to manage business operations and customer relations. The company is especially known for its ERP software. SAP France, a 98% subsidiary of SA SAP France Holding, itself wholly owned by the German group, had deposited funds under a Cash Management […]

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

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A Danish parent in the Maersk group’s oil and gas segment, Maersk Oil and Gas A/S (Mogas), had operating losses for FY 1986 to 2010, although the combined segment was highly profitable. The reoccurring losses was explained by the tax authorities as being a result of the group’s transfer pricing setup. “Mogas and its subsidiaries […]

Austria vs “ACQ-Group”, February 2022, Bundesfinanzgericht, Case No RV/7104702/2018

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“ACQ-Group” had acquired the shares in foreign subsidiaries and financed the acquisition partially by intra group loans. Furthermore, in the years following the acquisition, goodwill amortisations were deducted for tax purposes. The tax authorities issued an assessment where the interest rate on the loans had been reduced, and where costs related to external financing and […]

Canada vs Loblaw Financial Holdings Inc., December 2021, Supreme Court, Case No 2021 SCC 51

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In 1992, Loblaw Financial Holdings Inc. (“Loblaw Financial”), a Canadian corporation, incorporated a subsidiary in Barbados. The Central Bank of Barbados issued a licence for the subsidiary to operate as an offshore bank named Glenhuron Bank Ltd. (“Glenhuron”). Between 1992 and 2000, important capital investments in Glenhuron were made by Loblaw Financial and affiliated companies […]

Indonesia vs PT Tech Data Advanced Solutions Indonesia, November 2021, Supreme Court, Case No. 2747/B/PK/Pjk/2021

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PT Tech Data Advanced Solutions Indonesia (formerly PT AVnet Datamation Solutions) had paid service fees to a related party in FY 2013. Following an audit, the tax authorities issued an assessment where these service fees, among other issues, was found to be unsubstantiated by the evidence provided by the company. The Company disagreed and brought […]

Czech Republic vs D. D. D. SERVIS OPAVA v. o. s., August 2021, Supreme Administrative Court, Case No 1 Afs 109/2021 – 67

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Following an audit the tax authorities issued an assessment of additional income resulting from an adjustment of the tax deductions related to marketing expenses. According to the tax authorities the parties to the transactions were “otherwise related” within the meaning of the Czech arm’s length provisions in § 23 par. b) point 5 of the […]

Poland vs R.B.P. (P.) Sp. z o.o.., August 2021, Supreme Administrative Court, Case No II FSK 3830/18

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The company is a producer of household chemicals and belongs to the R. B. (“the Group”), which is active in the manufacture and sale of consumer products in the home, health and hygiene products industry. The Company has entered into supply agreements for the goods it produces with Group companies. On the basis of the […]

Indonesia vs PT Mondelez Indonesia, July 2021, Supreme Court, Case No. 2031/B/PK/PJK/2021

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Following an audit of PT Mondelez Indonesia, the tax authorities issued an assessment where certain controlled transactions had been adjusted resulting in additional taxable income. A complaint was filed with the Tax Court where, in a decision issued 26 October 2021 the Court partially set aside the assessment. An appeal was then filed with the […]

Belgium vs “Uniclick B.V.”, June 2021, Court of Appeal, Case No 2016/AR/455

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“Uniclick B.V.” had performed all the important DEMPE functions with regard to intangible assets as well as managing all risks related to development activities without being remunerated for this. Royalty-income related to the activities had instead been received by a foreign group company incorporated in Ireland and with its place of management in Luxembourg. In […]

France vs Société Générale S.A., Feb 2021, Administrative Court of Appeal, Case No 16VE00352

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Société Générale S.A. had paid for costs from which its subsidiaries had benefited. The costs in question was not deducted by Société Générale in its tax return, but nor had they been considered distribution of profits subject to withholding tax. Following an audit for FY 2008 – 2011 a tax assessment was issued by the […]

Czech Republic vs. STARCOM INTERNATIONAL s.r.o., February 2021, Regional Court , Case No 25Af 18/2019 – 118

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A tax assessment had been issued for FY 2013 resulting in additional taxes of to CZK 227,162,210. At first the tax administration disputed that the applicant had purchased 1 TB SSDs for the purpose of earning, maintaining and securing income. It therefore concluded that the Starcom Internatioal had not proved that the conditions for tax […]

Bulgaria vs CBS, October 2020, Supreme Administrative Court, Case No 12349

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By judgment of 22 May 2020, the Administrative Court set aside a tax assessment in which CBS International Netherlands B.V. had been denied reimbursement of withholding tax related to royalties and license payments. An appeal was filed by the tax authorities with the Supreme Administrative Court. In the appeal the tax authorities held that the […]

Canada vs Loblaw Financial Holdings Inc., April 2020, Federal Court of Appeal, Case No 2020 FCA 79

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In the case of Canadian grocery chain Loblaw, the Canadian Tax Court in 2018 found that using an offshore banking affiliate in a low tax jurisdiction – Barbados – to manage the groups investments did not constitute tax avoidance. However, the Tax Court’s interpretation of a technical provision in the Canadian legislation had the consequence […]

Norway vs Orange Business Norway A/S, January 2020, Borgarting Lagmannsrett, Case No 2018-84331

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Orange Business Norway AS, a subsidiary of the French Orange Telecom Group, had been issued a tax assessment for FY 2006-2008. According to the Norwegian tax authorities, Orange Business Norway had determined the remuneration by applying a Profit Split Method in a way that closely resembled Global formulary apportionment. The tax authorities also found that […]

France vs ST Dupont, March 2019, Administrative Court of Paris, No 1620873, 1705086/1-3

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ST Dupont is a French luxury manufacturer of lighters, pens and leather goods. It is majority-owned by the Dutch company, D&D International, which is wholly-owned by Broad Gain Investments Ltd, based in Hong Kong. ST Dupont is the sole shareholder of distribution subsidiaries located abroad, in particular ST Dupont Marketing, based in Hong Kong. Following […]

Spain vs ICL ESPAÑA, S.A. (Akzo Nobel), March 2018, Audiencia Nacional, Case No 1307/2018 ECLI:ES:AN:2018:1307

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ICL ESPAÑA, S.A., ICL Packaging Coatings, S.A., were members of the Tax Consolidation Group and obtained extraordinary profits in the financial years 2000, 2001 and 2002. (AKZO NOBEL is the successor of ICL ESPAÑA, as well as of the subsidiary ICL PACKAGING.) On 26 June 2002, ICL ESPAÑA, S.A. acquired from ICL Omicron BV (which […]

Costa Rica vs Reca Química S.A., December 2017, Supreme Court, Case No 01586 – 2017

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Reca Química is active in industrial production of paints and synthetic resins. Its parent company is H.B. Fuller which is based in the United States. According to the “Transfer Pricing Policy” set by the parent company of the group and in place since 1992, a 10% margin on sales was applied to inventory transferred between […]

India vs BG Exploration and Production Ltd., April 2017, Income Tax Appellate Tribunal Delhi, Case no. 2227/Del/2014 & CO 13/Del/2015

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BG Exploration and Production Ltd. had determined the remuneration for various services provided on an aggregated basis by applying the TNMM method using profit to sales as the Profit Level Indicator. The tax authorities found that a CUP method was the most appropriate method and that the various services provided should be priced separately. On […]

Spain vs. Schwepps (Citresa), February 2017, Spanish Supreme Court, case nr. 293/2017

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The Spanish Tax administration made an income adjustment of Citresa (a Spanish subsidiary of the Schweeps Group) Corporate Income Tax for FY 2003, 2004, 2005 and 2006, resulting in a tax liability of €38.6 millon. Citresa entered into a franchise agreement and a contract manufacturing agreement with Schweppes International Limited (a related party resident in the Netherlands). […]

Costa Rica vs Reca Química, September 2015, Administrative Court, Case No 00147 – 2015 Case File 11-006793-1027-CA

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Reca Química is active in industrial production of paints and synthetic resins. Its parent company is H.B. Fuller which is based in the United States. According to the “Transfer Pricing Policy” set by the parent company and in place since 1992, a 10% margin on sales was applied to inventory transferred between affiliates. However, during […]

Brazil vs LG Electronics Do Brasil LTDA., May 2016, Administrative Court of Appeals, Case No 1302-001,162

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LG Electronics Do Brasil LTDA imported goods from a related company and used the “resale price minus” method to determine the arm’s length price. Following an audit, an assessment was issued for FY 2006 and 2007 where the tax authorities rejected the pricing method chosen by LG Electronics. An appeal was filed by LG Electronics […]

Austria vs A & W AG, April 2010, Unabhängiger Finanzsenat, Case No RV/3837-W/09

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A & W AG, a company based in Germany, had maintained a permanent establishment in Austria which provided “distribution and support of software” services. No profits had been attributed to the Austrian permanent establishment. An assessment was issued where profits for FY 1998 to 2002 had been determined by the tax authorities using the cost […]

Canada vs Prévost Car Inc, April 2008, Tax Court of Canada, Case No 2008 TCC 231

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Prévost is a resident Canadian corporation who declared and paid dividends to its shareholder Prévost Holding B.V. (“PHB.V.”), a corporation resident in the Netherlands. When Prévost paid the dividends it withheld five percent in tax. The tax authorities issued an assessments against Prévost in respect of the aforementioned dividends. The tax authorities assessed on the […]

Netherlands vs “Dutch Low Risk Treasury B.V.”, August 2003, District Court, Case No 01/04083, ECLI:NL:GHAMS:2003:AJ6865

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This case concerns a Dutch treasury company with a low risk intra-group borrowing and on-lending activity. The interested party was incorporated on 5 August 1995 by a legal person named V Limited, under Canadian law. Its subscribed and paid-up capital amounted to NLG 40,000 in the years under review. The claimant is part of the […]

France vs. Caterpillar, October 1989, CE No 65009

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In Caterpillar, a 5% royalty was found to be an arm’s-length rate for the manufacturing and assembling operations. The court did not accept that there should be different rates for the two different activities. Excerpt from the Judgement “…According to the administration, the rate of the royalty paid by the company “Caterpillar France” is admissible […]