Legal issue: Arm's length principle

Denmark vs Maersk Oil and Gas A/S (TotalEnergies EP Danmark A/S), September 2023, Supreme Court, Case No BS-15265/2022-HJR and BS-16812/2022-HJR

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Maersk Oil and Gas A/S (later TotalEnergies EP Danmark A/S) continued to make operating losses, although the group’s combined oil and gas operations were highly profitable. Following an audit of Maersk Oil, the tax authorities considered that three items did not comply with the arm’s length principle. Maersk Oil incurred all the expenses for preliminary […]

Czech Republic vs Mayer & Cie. CZ, s.r.o., August 2023, Supreme Administrative Court, Case No. 10 Afs 162/2021 – 50

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Mayer & Cie is one of the world’s leading suppliers of industrial knitting machines. Following an audit, the tax authorities disallowed a tax deduction of CZK 4,066,097 in FY2014, which Mayer & Cie. had incurred as a result of the disposal of unusable material. According to the tax authorities, the disposal was made on the […]

Czech Republic vs. Stora Enso Wood Products Ždírec s.r.o., August 2023, Supreme Administrative Court, No.  7 Afs 358/2021 – 34

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Stora Enso Wood Products Ždírec s.r.o. a the Czech subsidiary in the Stora Enso Group, a multinational manufacturer of packaging and building products. In the years in question, Enso Wood Products Ždírec s.r.o. provided manufacturing services to its parent company and made losses. An audit was initiated by the tax authorities focusing on the method […]

Czech Republic vs. Eli Lilly ČR, s.r.o., August 2023, Supreme Administrative Court, No. 6 Afs 125/2022 – 65

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Eli Lilly ČR imports pharmaceutical products purchased from Eli Lilly Export S.A. (Swiss sales and marketing hub) into the Czech Republic and Slovakia and distributes them to local distributors. The arrangement between the Czech company and the Swiss company is based on a Service Contract in which Eli Lilly ČR is named as the service […]

Korea vs “Fuel Injection Corp”, August 2023, District Court, Case No 2022구합50258

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In this case, “Fuel Injection Corp” had acquired a patent from its shareholder. The patent related to the manufacture of fuel injectors for marine engines. The tax authorities considered that the value placed on the patent by the related parties was unsubstantiated. On this basis, a tax assessment was issued in which “Fuel Injection Corp”‘s […]

UK vs JTI Acquisitions Company (2011) Ltd, August 2023, Upper Tribunal, Case No [2023] UKUT 00194 (TCC)

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JTI Acquisitions Company Ltd was a UK holding company, part of a US group, used as an acquisition vehicle to acquire another US group. The acquisition was partly financed by intercompany borrowings at an arm’s length interest rate. The tax authorities disallowed the interest expense on the basis that the loan was taken out for […]

Italy vs Otis Servizi s.r.l., August 2023, Supreme Court, Sez. 5 Num. 23587 Anno 2023

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Following an audit of Otis Servizi s.r.l. for FY 2007, 2008 and 2009 an assessment of additional taxable income was issued by the Italian tax authorities. The first part of the assessment related to interest received by OTIS in relation to the contract called “Cash management service for Group Treasury” (hereinafter “Cash Pooling Contract”) signed […]

Netherlands vs “Lux Credit B.V.”, July 2023, Court of Hague, Case No AWB – 21_4016 (ECLI:NL:RBDHA:2023:12061)

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“Lux Credit B.V.” took out various credit facilities from related parties [company name 2] s.a.r.l. and [company name 3] s.a.r.l. – both resident in Luxembourg. These were financings whereby “Lux Credit facility B.V.” could draw funds (facilities) up to a pre-agreed maximum amount. In doing so, “Lux Credit B.V.” owed both interest and “commitment fees”. […]

Denmark vs “Soy A/S”, June 2023, Eastern High Court, SKM2023.316.ØLR

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Two issues were adressed in this case – transfer pricing and withholding taxes. The transfer pricing issue concerned whether the Danish tax authorities (SKAT) had been entitled to issue an assessment on controlled transactions made between “Soy A/S” and a flow-through company in the group located in a low tax jurisdiction. The withholding tax issue […]

Colombia vs Bavaria S.A., June 2023, Supreme Administrative Court, Case No. 25000-23-37-000-2017-00654-01 (25885)

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Bavaria S.A. is part of the SABMiller group – a multinational brewing and beverage group – and in FY2013 the company had deducted costs related to various intra-group transactions – licences, cost of sales, procurement services, administrative services, technical support, other expenses (reimbursements to related parties), etc. Following an audit, the Colombian tax authorities disallowed […]

Portugal vs R… Cash & C…, S.A., June 2023, Tribunal Central Administrativo Sul, Case 2579/16.6 BELRS

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The tax authorities had issued a notice of assessment which disallowed tax deductions for royalties paid by R…Cash & C…, S.A. to its Polish parent company, O…Mark Sp. Z.o.o. R… Cash & C…, S.A. appealed to the Administrative Court, which later annulled the assessment. The tax authorities then filed an appeal with the Administrative Court […]

Czech Republic vs ERT Automotive Bohemia s.r.o., June 2023, Supreme Administrative Court, Case No 10 Afs 257/2022

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ERT Automotive Bohemia s.r.o. is active in the automotive industry. From 1 January 2013 to 30 November 2013, it provided the manufacture and repair of upholstery products for the automotive industry for its ‘sister’ company, Reiner Lasertec GmbH, established in Germany (both companies were owned at the time by the parent company Notos Beteiligungen GmbH, […]

Spain vs Institute of International Research España S.L., June 2023, Audiencia Nacional, Case No SAN 3426/2023 – ECLI:EN:AN:2023:3426

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Institute of International Research España S.L. belongs to the international group Informa Group Brand, of which Informa PLC, a company listed on the London Stock Exchange, is the parent company. In 2006 it had entered into a licence agreement (“for the use of the Licensed Property, Copyright, Additional Property Derived Alwork, the Mark and Name […]

Netherlands vs “X Shareholder Loan B.V.”, June 2023, Court of Appeals, Case No 22/00587, ECLI:NL:GHAMS:2023:1305

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After the case was remanded by the Supreme Court in 2022, the Court of Appeal classified a Luxembourg company’s shareholder loan to “X Shareholder Loan B.V.” of €57,237,500 as an ‘imprudent loan’, with the result that the interest due on that loan was only tax deductible to a limited extent. The remaining interest was non-deductible […]

Israel vs Medtronic Ventor Technologies Ltd, June 2023, District Court, Case No 31671-09-18

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In 2008 and 2009 the Medtronic group acquired the entire share capital of the Israeli company, Ventor Technologies Ltd, for a sum of $325 million. Subsequent to the acquisition various inter-company agreements were entered into between Ventor Technologies Ltd and Medtronics, but no transfer of intangible assets was recognised by the Group for tax purposes. […]

Spain vs Ferroli España, S.L.U., May 2023, Audiencia Nacional, Case No 3400/2023 – ECLI:EN:AN:2023:3400

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Ferroli España, S.L.U. is a Spanish manufacturer manufacture of cookers and heaters. In FY 2010 and 2011 the company had various transactions with other companies in the Ferroli Group and reported negative profit margins on these transactions. According to the company this was due to the financial crises in Spain. Following an audit, the tax […]

India vs Auronext Pharma Private Limited, May 2023, Income Tax Appellate Tribunal, ITA-TP No. 486/Hyd/2022

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An assessment had been issued by the tax authorites in regards of Auronext Pharma’s pricing of purchase and sales transactions with related parties. The tax authorities had rejected the CUP method applied by Auronext Pharma. “Since the comparable transactions were with related parties those transactions cannot be considered under CUP method for the purpose of […]

Portugal vs “A…, Sociedade Unipessoal LDA”, May 2023, Supremo Tribunal Administrativo, Case No JSTA000P31011

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“A…, Sociedade Unipessoal LDA” had taken out two intra group loans with the purpose of acquiring 70% of the shares in a holding company within the group. The tax authorities disallowed the resulting interest expenses claiming that the loan transactions lacked a business purpose. The assessment was later upheld by the tax court in decision […]

Czech Republic vs STOCK Plzeň-Božkov, s. r. o., May 2023, Supreme Administrative Court, Case No 10 Afs 93/2021 – 69

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STOCK Plzeň-Božkov, s. r. o. had deducted costs for production consultancy services, financial services and internal support services allegedly received from related parties. The tax authorities disallowed deduction of the costs for tax purposes on the basis that the evidence provided by STOCK regarding the nature and pricing of the services was insufficient. Judgement of […]

Germany vs “Z Pipeline”, May 2023, FG Düsseldorf, Case No 3 K 1940/17 F

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“Z Pipeline” is a limited partnership which operates a network of pipelines. The network runs through Germany, Belgium and the Netherlands. During the year in question, “Z Pipeline”‘s administrative HQ was in Germany. Operational control of the pipeline was exercised by an ‘operations centre’ located in the Netherlands. It was not disputed that the pipeline […]

Argentina vs Materia Pampa S.A., April 2023, Tax Court, Case No INLEG-2023-48473748-APN-VOCXXI#TFN

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The Argentinian company Materia Pampa S.A. exported products to a Brazilian company, Companhia De Bedidas Das Americas in Brazil (Ambev), via a related party in Uruguay, Maltería Uruguay S.A. There was a significant difference between the price declared on export to Uruguay and the price used for the subsequent final shipment to Brazil. An assessment […]

Italy vs Menfi Industria s.p.a., December 2022, Supreme Court, Cases No 11252/2023

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Menfi Industria s.p.a. is a manufacturer of household goods – appliances, crockery, stainless steel items. Following an audit the tax authorities served Menfi Industria a notice of assessment for FY 2008. According to the tax authorities the company had sold products to another group company, at a price lower than the normal value. The adjustment […]

Malaysia vs Watsons Personal Care Stores Holding Limited, April 2023, High Court, Case No WA-14-20-06/2020

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In 2003, Watsons Personal Care Stores Holding Limited borrowed USD 36,842,335.00 from Watson Labuan in order to acquire a substantial number of shares in Watson Malaysia and in 2012, the Company borrowed another USD 1,276,000.00 from Watson Labuan to finance the acquisition of shares. According to the loan agreement the annual interest rate was 3% […]

Czech Republic vs LAKUM – KTL, a. s., April 2023, Regional Court, Case No 25 Af 62/2020

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LAKUM KTL, a. s. had deducted from its taxable income costs for the purchase of advertising and promotional services from PRESSTEX MEDIA and PAMBROKE Media. Following an audit, the tax authorities concluded that LAKUM had entered into a legal relationship with PRESSTEX and PAMBROKE for the purpose of reducing the tax base. The tax authorities […]

Malaysia vs Sandakan Edible Oils SDN BHD, April 2023, High Court, Case No WA-14-2-02/2021

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Sandakan Edible Oils SDN BHD principal activity is, amongst others, to carry out the refining and sale of edible oils and related products, and the packaging and sale of cooking oil. It applied the Comparable Uncontrolled Price (CUP) method as the transfer pricing methodology to determine the arm’s length pricing of its controlled transactions. Following […]

Argentina vs Dart Sudamericana S.A., March 2023, Tax Court, Case No 35.050 I (IF-2023-35329672-APN-VOCII#TFN)

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Dart Sudamericana S.A. (now Dart Sudamericana SRL) imported so-called EPS T601 pellets from related party abroad for use in its manufacturing activities. The controlled transactions had been priced using the CUP method. Following an audit the tax authorities made a transfer pricing adjustment where it had applied the transactional net margin method (TNMM). According to […]

Ukrain vs “LK Ukraine Group”,March 2023, Supreme Court, Case No. 1340/3525/18 (proceedings No. K/9901/11787/19)

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The tax authority, based on the results of an audit, found that the prices in controlled export transactions of goods, carried out between “LK Ukraine Group” and related parties, did not comply with the arm’s length principle, i.e. the selling prices of the goods were lower than the minimum values of the arm’s length range. […]

Korea vs “Korean Clothing Corp”, March 2023, Tax Tribunal, Case No 조심 2022중2863

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“Korean Clothing Corp” had two overseas subsidiaries – a fabric dyeing entity (AAA) and a sweater manufacturing entity (BBB). Following an tax audit for FY 2016~2020, the tax authorities issued an assessment of additional tax as a result of non arm’s length transactions. According to the tax authorities “Korean Clothing Corp” had not collected accounts […]

Netherlands vs “Fertilizer B.V.”, March 2023, Hoge Raad – AG Conclusion, Case No 22/01909 and 22/03307 – ECLI:NL:PHR:2023:226

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“Fertilizer B.V.” is part of a Norwegian group that produces, sells and distributes fertiliser (products). “Fertilizer B.V.” is the parent company of a several subsidiaries, including the intermediate holding company [C] BV and the production company [D] BV. The case before the Dutch Supreme Court involves two points of dispute: (i) is a factually highly […]

France vs SAS Blue Solutions, March 2023, CAA, Case N° 21PA06144 & 21PA06143

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SAS Blue Solutions manufactures electric batteries and accumulators for electric and hybrid vehicles and car-sharing systems. In FY 2012-2014 it granted a related party – Blue Solutions Canada – non-interest-bearing current account advances of EUR 42.9 million, EUR 43 million, and EUR 39 million. The French tax authorities considered that the failure to charge the […]

Liechtenstein vs “A Corporation”, March 2023, Administrative Court, Case No VGH 2022/099

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“A Corporation” had granted various loans, firstly to a French subsidiary and secondly to the Liechtenstein sister company, B Corporation. The latter essentially passed on these loans to its German subsidiary C GmbH. A Corporation and B Corporation are each wholly owned by Mr D, who is resident in Liechtenstein. B Corporation has a 94% […]

Portugal vs “N…S.A.”, March 2023, Tribunal Central Administrativo Sul, Case 762/09.0BESNT

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The tax authorities had issued a notice of assessment which, among other adjustments, disallowed a bad debt loss and certain costs as tax deductible. In addition, royalties paid to the parent company were adjusted on the basis of the arm’s length principle. N…S.A. appealed to the Administrative Court, which partially annulled the assessment. Both the […]

France vs SAS Sames Kremlin, March 2023, CAA de PARIS, Case No 21PA06439

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SAS Sames Kremlin marketed its products abroad through subsidiaries or independent agents, depending on the territory. In Argentina, Brazil, India, Portugal and Russia it sold its products through subsidiaries under either a buy/sell distributor agreement or a commissionaire agreement. In Iran, Turkey and South Korea it sold the goods through independent agents to whom it […]

France vs SA Exel Industries, March 2023, CAA de PARIS, Case No 21PA06438

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SA Exel Industries marketed its products abroad through subsidiaries or independent agents, depending on the territory. In Brazil, India, Argentina, Russia and Portugal it sold its products through subsidiaries under either a buy/sell distributor agreement or a commissionaire agreement. In Iran, Turkey and South Korea it sold through independent agents to whom it paid a […]

Mauritius vs Innodis Ltd, February 2023, Supreme Court, Case No 2023 SCJ 73

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Innodis granted loans to five wholly-owned subsidiaries between 2002 and 2004. The loans were unsecured, interest-free and had a grace period of one year. The subsidiaries to which the loans were granted were either start-up companies with no assets or companies in financial difficulties. The tax authorities (MRA) had carried out an assessment of the […]

Portugal vs J… – GESTÃO DE EMPRESAS DE RETALHO SGPS. S.A., February 2023, Administrative Court of Appeal, Case 657/07.1 BELSB

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The tax authorities had issued a notice of assessment in which royalty payments had been adjusted on the basis of the arm’s length principle. “I_ 3.1.8 – 9,027,469.67 euros – Transfer prices – Royalties After verifying all documentation submitted by dependent companies F…Hipermercados, SA and P…Distribuição Alimentar, SA, at the request of the Tax Administration […]

US vs 3M Company And Subsidiaries, February 2023, US Tax Court, 160 T.C. No. 3 (Docket No. 5816-13)

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“3M Parent” is the parent company of the 3M Group and owns the Group’s trademarks. Other intellectual property, including patents and unpatented technology, is owned by “3M Sub-parent”, a second-tier wholly owned US subsidiary of 3M Parent. “3M Brazil” has used trademarks owned by 3M US in its business operations. 3M Brazil’s use of these […]

Italy vs Dolce & Gabbana S.R.L., November 2022, Supreme Court, Case no 02599/2023

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Italien fashion group, Dolce & Gabbana s.r.l. (hereinafter DG s.r.l.), the licensee of the Dolce&Gabbana trademark, entered into a sub-licensing agreement with its subsidiary Dolce&Gabbana Industria (hereinafter DG Industria or Industria) whereby the former granted to the latter the right to produce, distribute and sell products bearing the well-known trademark throughout the world and undertook […]

Spain vs “SGGE W T Spanish branch”, January 2023, TEAC, Case No Rec. 00/07503/2020/00/00

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SGGE W T is a Spanish branch of SGG that carries out distribution and marketing activities related to the information technology network products and services. SGG is part of the KF group which “is an international group that provides solutions and services in the Information Technology (IT) sector, starting its activity in . .. as […]

Panama vs “Tech Distributor S.A.”, January 2023, Administrative Tax Tribunal, Case No TAT-RF-006 Expediente: 115-19

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The tax authorities issued a transfer pricing adjustment of USD 1.4 million for FY2013, claiming that the remuneration of “Tech Distributor S.A.” had not been determined in accordance with the arm’s length principle. According to the tax authorities, there were inconsistencies between the amounts of controlled transactions reported in the transfer pricing documentation and the […]

Czech Republic vs ARGO-HYTOS s.r.o., January 2023, Supreme Administrative Court, No. 2 Afs 66/2021 – 57

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Following an audit the tax authorities concluded that ARGO-HYTOS s.r.o. sold goods (valves, blocks and hydraulic aggregates) to related parties at a price that differed from the prices that would have been agreed between unrelated parties under the same or similar conditions. Furthermore, according to the tax authorities ARGO-HYTOS s.r.o. did not satisfactorily document the […]

Bulgaria vs Yazaki Bulgaria Ltd, January 2023, Administrative Court, Case No 22/2022

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Yazaki Bulgaria Ltd is active in the automotive industry and is part of the Japanese Yazaki Group. It had used the transactional net margin method (TNMM) to demonstrate that prices for the sale of products to related parties were at arm’s length. Following an audit, the tax authorities found that the company’s profit was outside […]

Bulgaria vs Vivacom Bulgaria EAD, January 2023, Supreme Administrative Court, Case No 81/2023

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In 2013, Viva Telecom Bulgaria EAD, as borrower/debtor, entered into a convertible loan agreement with its parent company in Luxembourg, InterV Investment S.a.r.l.. According to the agreement, the loan was non-interest bearing and would eventually be converted into equity. The tax authorities considered the arrangement to be a loan and applied an arm’s length interest […]

India vs Mylan Pharmaceuticals Private, December 2022, Income Tax Appellate Tribunal, ITA No.122/Hyd/2022

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Mylan Pharmaceuticals is engaged in the business of trading pharmaceutical products in both domestic and export markets. It also provides business support services and research and development activities to other group companies. Following an audit, the tax authorities issued a notice of assessment which partially disallowed deductions for advertising and promotional expenses for the launch […]

France vs Bupa Insurance, December 2022, Conseil d’État, Case No 450796 (ECLI:FR:CECHR:2022:450796.20221221)

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In 2009 a British company – Bupa Insurance Limited – absorbed the Danish company International Health Insurance, whose shares it had acquired in 2005 and which had had a French branch since 1993. Following an audit for FY 2009 and 2010, the tax authorities considered that the French branch had passed on to Bupa Insurance […]

Malaysia vs Executive Offshore Shipping SDN BHD, December 2022, High Court, Case No WA-25-388-12/2021

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Executive Offshore Shipping SDN BHD is in the business of chartering offshore support vessels. It is related to another company, one Eagle High (L) Limited which is a ship-owning company registered in the special tax zone of Labuan where transfer pricing provisions were first introduced in 2020. Eagle High (L) Limited provided (i) charter hire […]

Portugal vs “V… Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.”, December 2022, Supreme Administrative Court, Case 02142/11.8BELRS

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The tax authorities had issued a notice of assessment in which payments for a parent company guarantee had been adjusted on the basis of the arm’s length principle. The Administrative Court of Appeal annulled the assessment. The tax authorities filed an appeal with the Supreme Administrative Court. Judgement of the Court The Supreme Administrative Court […]

Italy vs Prinoth S.p.A., December 2022, Supreme Administrative Court, Case No 36275/2022

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Prinoth S.p.A. is an Italian manufacturer of snow groomers and tracked vehicles. For a number of years the parent company had been suffering losses while the distribution subsidiaries in the group had substantial profits. Following an audit the tax authorities concluded that the transfer prices applied between the parent company and the distributors in the […]

Czech Republic vs. Eli Lilly ČR, s.r.o., December 2022, Supreme Administrative Court, No. 7 Afs 279/2021 – 65

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Eli Lilly ČR imports pharmaceutical products purchased from Eli Lilly Export S.A. (Swiss sales and marketing hub) into the Czech Republic and Slovakia and distributes them to local distributors. The arrangement between the local company and Eli Lilly Export S.A. is based on a Service Contract in which Eli Lilly ČR is named as the […]

Spain vs Universal Pictures International Spain SL, December 2022, Audiencia Nacional, Case No SAN 5855/2022 – ECLI:EN:AN:2022:5855

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Universal Pictures International Spain SL is a distributor of films on the Spanish Market. It distributes films both from related parties (Universal Pictures) and from unrelated parties. Following an audit, the Spanish tax authorities issued an assessment where the remuneration received for distribution of films from related parties had been compared to the remuneration received […]

Czech Republic vs Hanácká zemědělská společnost Jevíčko, a.s., December 2022, Regional Court , 52 Af 19/2022-82

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In the course of the income tax audit conducted on Hanácká, the tax authorities found that interest expenses had been in its calculation of taxable income, corresponding to a rate of 8.5%. The tax authorities determined the arm’s length interest rate to be 2.46% and an adjustment was issued amounting to the difference between the […]

Italy vs Quaker Italia Srl, November 2022, Supreme Administrative Court, Case No 34728/2022

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Quaker Italia Srl is a non-exclusive distributor of Quaker products in Italy – lubricating oils and greases. It also carries out a minor manufacturing activity. An assessment was issued by the tax authorities in 2012 regarding the remuneration received for the distribution activities in FY 2007. The Tax authorities considered that the documentation provided by […]

Poland vs C. spółka z o.o. , November 2022, Supreme Administrative Court, Case No II FSK 974/22

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C. spółka z o.o. is part of a larger group and mainly (95%) sells products (boxes, metal enclosures, etc.) and related services to related parties. According to its transfer pricing documentation the “cost-plus” method had been used to determine the prices of products sold to related parties. The company was audited for FY 2016. According […]

Luxembourg vs “TR Swap SARL”, November 2022, Administrative Tribunal, Case No 43535

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The owner of a buy sell distributor in the pharmaceutical sector had entered into a total return swap with the company and on that basis the company had deducted a commission corresponding to 85% of net profits from its taxable income. The tax authorities disallowed the deduction claiming the swap-arrangement was not at arm’s length. […]

Czech Republic vs ANITA B s.r.o., November 2022, Supreme Administrative Court, Case No 4 Afs 381/2021-40

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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 price agreed between the related parties for advertising space was excessive and not determined in accordance with the arm’s length principle. ANITA B s.r.o. filed […]

Spain vs Transalliance Iberica SA, November 2022, Audiencia Nacional, Case No SAN 5336/2022 – ECLI:EN:AN:2022:5336

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Transalliance Iberica SA had priced its controlled transactions for the years 2008-2013 by comparing the gross margin achieved on an overall basis with the gross margins of comparable companies. Following an audit, the tax authorities issued a notice of assessment rejecting the method used by the company due to differences in the treatment of cost […]

Greece vs “Pharma Distributor Ltd.”, November 2022, Tax Court, Case No ΔΕΔ 3712/2022

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Following an audit, the Greek tax authorities determined that the profit of “Pharma Distributor Ltd” for sales and service activities had not been determined in accordance with the arm’s length principle. The tax authorities issued an assessment of additional taxable income, rejecting the resale price method used by “Pharma Distributor Ltd” and instead applying the […]

France vs Electricité de France, November 2022, Conseil d’État, Case No 462383 (ECLI:FR:CECHR:2022:462383.20221116)

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In 2009 the English company EDF Energy UK Ltd (EDFE), a wholly-owned subsidiary of SAS Electricité de France International (SAS EDFI), issued 66,285 bonds convertible into shares (OCAs) for a unit nominal value of EUR 50,000. SAS EDFI subscribed to all of these OCAs for their nominal value, i.e. a total subscription price of EUR […]

Czech Republic vs HPI – CZ spol. s r.o., November 2022, Supreme Administrative Court, Case No 9 Afs 37/2022 – 37

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HPI – CZ spol. s r.o. is a subsidiary in the Monier group which is active in the production, sales and services of roofing and insulation products. In June 2012 the Monier group replaced an existing cash pool arrangement with a new cash pool arrangement. The documents submitted show that on 1 April 2009 HPI […]

Hungary vs “Gas-Trader KtF”, November 2022, Supreme Administrative Court, Case no Kfv.I.35.343/2022/8

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“Gas-Trader KtF” – a subsidiary in the E.ON group – had entered into loan agreements with other group companies and the related parties had determined the interest rate by application of the CUP method using the Thomson Reuters LoanConnector database. Comparable transactions was extracted from the database by searching for credit rating, type of debtor […]

The European Commission vs Fiat Chrysler Finance Europe, November 2022, European Court of Justice, Case No C-885/19 P and C-898/19 P

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In 2012, the Luxembourg tax authorities issued a tax ruling in favour of Fiat Chrysler Finance Europe (‘FFT’), an undertaking in the Fiat group that provided treasury and financing services to the group companies established in Europe. The tax ruling at issue endorsed a method for determining FFT’s remuneration for these services, which enabled FFT […]

Denmark vs. “C-Advisory Business ApS”, November 2022, Supreme Court, Case No BS-22176/2021-HJR (SKM2023.8.HR)

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A was the sole owner of “C-Advisory Business ApS” established in Denmark in 2003. The company advised and represented taxpayers in cases related to tax deductions for land improvements to immovable property. A was also the sole owner of a company established in Dubai in 2006. The Dubai company provided services for “C-Advisory Business ApS” […]

Sweden vs TELE2 AB, November 2022, Court of Appeal, Case No 1298-21

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The Swedish group TELE2, one of Europe’s largest telecommunications operators, had invested in an entity in Kazakhstan, MTS, that was owned via a joint venture together with an external party. Tele2 owned 51% of the Joint venture and MTS was financed by Tele2’s financing entity, Tele2 Treasury AB, which, during 2011-2015, had issued multiple loans […]

Czech Republic vs HPI – CZ spol. s r.o., October 2022, Supreme Administrative Court, Case No 5 Afs 141/2021 – 37

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HPI – CZ spol. s r.o. is a subsidiary in the Monier group. In June 2012 the group replaced an existing cash pool arrangement with a new cash pool arrangement. Following an audit of HPI the tax authorities issued an assessment of additional income for FY 2012 resulting from HPI’s participation in the new cash […]

France vs SA SACLA, October 2022, Conseil d’État, Case No. 457695 (ECLI:FR:CECHS:2022:457695.20221027)

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SA SACLA, which trades in protective clothing and footwear as well as small equipment, was subject of a tax audit covering the FY 2007, 2008 and 2009. In a proposed assessment issued in December 2011, the tax authorities increased its taxable income on the basis of Article 57 of the General Tax Code, by considering […]

Spain vs “XZ Insurance SA”, October 2022, Tribunal Economic-Administrative Central (TEAC), Case No Rec. 00/03631/2020/00/00

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“XZ Insurance SA” is the parent company in a group engaged in insurance activities in its various branches, both life and non-life, finance, investment property and services. An audit was conducted for FY 2013-2016 and in 2020 an assessment was issued in relation to both controlled transactions and other transactions. Among outher issued the tax […]

France vs Yazaki Systems Technologies France, October 2022, CAA de Versailles, Case No. 20VE02286

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Yazaki Systems Technologies France (SY France) is wholly owned by the German company SY Systems Technologie Europe GmbH, which became Yazaki Systems Technologie Europe GmbH (SY Europe) in 2013 following the acquisition of 100% of its shares by the Japanese parent company that created the group, Yazaki Corporation Japan. The group develops and distributes wiring […]

Netherlands vs “Tobacco B.V.”, October 2022, Rechtbank Noord-Holland, Case No ECLI:NL:RBNHO:2022:8936

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“Tobacco B.V.” is a Dutch company belonging to an international tobacco group. Following an audit an assessment of additional taxable income of €196,001,385, €220,624,304 and €179,896,349 for FY 2008-2010 was issued to “Tobacco B.V.”, and a penalty for non-compliance for FY 2010 of €477,624 was imposed. The dispute focused on whether the fees charged by […]

New Zealand vs Frucor Suntory, September 2022, Supreme Court, Case No [2022] NZSC 113

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Frucor Suntory (FHNZ) had deducted purported interest expenses that had arisen in the context of a tax scheme involving, among other steps, its issue of a Convertible Note to Deutsche Bank, New Zealand Branch (DBNZ), and a forward purchase of the shares DBNZ could call for under the Note by FHNZ’s Singapore based parent Danone […]

Netherlands vs “Agri B.V.”, September 2022, Court of Appeal, Case No AWB-16_5664 (ECLI:NL:RBNHO:2022:9062)

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“Agri B.V.” is a Dutch subsidiary in an international group processing agricultural products. Following a restructuring in 2009 “Agri B.V.” had declared a profit of € 35 million, including € 2 million in exit profits. In an assessment issued by the tax authorities this amount had been adjusted to more than € 350 million. Judgement […]

Netherlands vs “BR-AGRI B.V.”, September 2022, Rechtbank Noord-Holland, Case No ECLI:NL:RBNHO:2022:9062

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A Dutch company “BR-AGRI B.V.” had transferred functions, assets and risks to a Swiss sister company as part of a business restructuring. The profit resulting from the transfer had been determined by the group to be EUR 1,831,037. The Dutch tax authorities found that the arm’s length value of the assets transferred was EUR 350 […]

India vs Akzo Nobel India Pvt Ltd, September 2022, High Court of Delhi, ITA 370/2022

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The tax authorities had disallowed deductions for purported administrative services paid for by Akzo Nobel India to a group company in Singapore. The Income Tax Appellate Tribunal upheld the assessment in a Judgement issued in February 2022. An appeal was then filed by Akzo Nobel India with the High Court. Judgement of the High Court […]

France vs HCL Maître Pierre, September 2022, Conseil d’État, Case No. 455651 (ECLI:FR:CECHR:2022:455651.20220920)

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On 1 July 2013, HCL Maître Pierre issued a ten-year bond which were convertible into shares and bore interest at a rate of 12%, the accrued amount of which was capitalised annually until the date of redemption or conversion, together with a non-conversion premium at a rate of 3%, if applicable. This loan was subscribed […]

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 […]

Italy vs Ferrari SpA, September 2022, Supreme Court, Case No 26695/2022 and 26698/2022

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In February 2016 the Regional Tax Commission rejected an appeal filed by the Revenue Agency against the first instance judgment, which had upheld an appeal brought by Italian car manufacturer, Ferrari S.p.A. against a notice of assessment issued by the Revenue Agency in which the company was accused of having applied prices lower than the […]

India vs Amway India Enterprises Pvt. Ltd., September 2022, High Court of Delhi, Case No ITA 313/2022

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Amway India is engaged in the business of direct selling of consumer products through multi-level marketing. For FY 2013-2014 Amway paid royalties to a foreign Amway group company. Following an audit, an assessment was issued by the tax authorities where the royalty had been reduced based on a benchmark study resulting in additional taxable income. […]

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