Legal issue: Legal formality

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 […]

Czech Republic vs DFH Haus CZ s.r.o., November 2022, Supreme Administrative Court, Case No 4 Afs 98/2022-45

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In 2013, DFH Haus CZ s.r.o. filed amended tax returns for 2006, 2010, and 2011, following the German tax authority’s adjustment of its transfer prices in 2006, in order to claim the resulting tax loss for 2006 and apply it against its tax liability in the Czech Republic for 2010 and 2011. The tax authorities […]

Czech Republic vs DFH Haus CZ s.r.o., November 2022, Supreme Administrative Court, Case No 4 Afs 287/2020-54

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In 2013, DFH Haus CZ s.r.o. filed amended tax returns for 2006, 2010, and 2011, following the German tax authority’s adjustment of its transfer prices in 2006, in order to claim the resulting tax loss for 2006 and apply it against its tax liability in the Czech Republic for 2010 and 2011. The tax authorities […]

Germany vs X GmbH & Co. KG, October 2022, European Court of Justice, Case No C-431/21

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A Regional Tax Court in Germany had requested a preliminary ruling from the European Court of Justice on two questions related to German transfer pricing documentation requirements. whether the freedom of establishment (Article 49 TFEU) or the freedom to provide services (Article 56 TFEU) is to be interpreted in such a way that it precludes […]

US vs Eaton Corp., August 2022, Sixth Circuit, Nos. 21-1569/2674

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Eaton is an Ohio corporation with a global presence. It manufactures a wide range of electrical and industrial products. During the relevant period—2005 and 2006—Eaton had its foreign subsidiaries in Puerto Rico and the Dominican Republic manufacture certain products which Eaton then sold to its other affiliates and third-party customers. In 2002, Eaton applied for an […]

Hong Kong vs Directors of Nam Tai Trading Company Limited, August 2022, Court of Appeal, Case FACV No. 1 of 2022

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The tax returns of Nam Tai Trading Company Limited (“NT Trading”) for the years 1996/97, 1997/98 and 1999/2000 were found by the tax authorities to be incorrect due to non arm’s length pricing of controlled transactions. Mr Koo and Mr Murakami, were directors of NT Trading at the time. Mr Koo signed the first and […]

Italy vs Mauser S.p.A., February 2022, Supreme Court, Case No 6283/2022

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Following an audit, Mauser S.p.A. received four notices of assessment relating to the tax periods from 2004 to 2007. These notices contested, in relation to all tax periods, the elusive purpose of a financing operation of Mauser S.p.A. by the non-resident parent company, as it was aimed at circumventing the non-deductibility of interest expense pursuant […]

Poland vs A. Sp. z o. o., February 2022, Supreme Administrative Court, Case No II FSK 1475/19

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A. Sp. z o.o. was established to carry out an investment project consisting in construction of a shopping center. In order to raise funds, the company concluded a loan agreement. The loan agreement was guaranteed by shareholders and other related parties. By virtue of the guarantees, the guarantors became solitarily liable for the Applicant’s obligations. […]

Italy vs Burckert Contromatic Italiana S.p.A., November 2021, Corte di Cassazione, Sez. 5 Num. 1417 Anno 2022

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Burkert Contromatic Italiana s.p.a. is engaged in sale and services of fluid control systems. The italian company is a subsidiary of the German BĂŒrkert Group. Following a tax audit, the Italian tax authorities issued a notice of assessment for FY 2007 on the grounds that the cost resulting from the transactions with its parent company […]

Poland vs R. Sp. z o. o., January 2022, Supreme Administrative Court, Case No II FSK 990/19

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R. Sp. z o.o. had requested a binding ruling/interpretation regarding tax deduction for the price paid to a related entity under restructuring. The request was denied by the tax authorities, as the question – according to the authorities – could only be answered under an Advance Pricing Agreement. R. Sp. z.o.o brought the issue before […]

Italy vs Pompea S.p.A., October 2021, Supreme Court, Case No 27636/2021

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This case deals with a non-interest bearing intragroup loan granted by Pompea S.p.A. to a foreign subsidiary and deductibility of interest expenses incurred by Pompea S.p.A. to obtain the funding needed to grant this loan to the subsidiary. The company was of the opinion that interest free inter-company loans were not covered by the Italien arm’s length […]

Australia vs CUB Australia Holding Pty Ltd, September 2021, Federal Court of Australia, Case No FCAFC 171

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In this case CUB Australia Holding Pty Ltd appeals a judicial review decision by a judge of the Federal Court. The tax authorities had issued a Notice on 4 March 2020 requesting CUB to provide certain details about documents over which CUB had claimed legal professional privilege (LPP). CUB declined to provide the requested details […]

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 […]

Netherlands vs “Related Party B.V.”, July 2021, District Court, Case No ECLI:NL:RBGEL:2021:3382

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In 2013 “Related Party B.V” entered into an agreement with “X BV” for the provision of transportation- and support services for oil and gas. The Dutch tax authority suspected that the parties were affiliated within the meaning of Section 8b of the Corporate Income Tax Act 1969. Decision of Court The Court decided in favor […]

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 […]

Russia vs PJSC Vimpelcom-Communications, May 2021, Arbitration Court of Moscow, Case No. A40-36350/21-140-1024

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PJSC Vimpelcom-Communications submitted to the tax authority a revised notice of controlled transactions for 2017, under which contract numbers for 68 transactions were adjusted, including an agreement with a foreign counterparty Veon Wholensale Services B.V. (Netherlands) for the provision of agency-services (the “Controlled Transactions”), and information was also provided on another transaction with another foreign […]

Netherlands vs “Share Owner/Lender”, February 2021, Supreme Court (Preliminary ruling by the Advocate General), Case No 20/01884

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The interested party bought AEX-listed shares, sold three-month futures based on those shares through its shareholder/broker [D], and lent the shares to [D] (stock lending). It received cash collateral ($ deposits as collateral) and a stock lending fee for its lending. According to the interested party, the shares always briefly reverted to its ownership around […]

Switzerland vs “Contractual Seller SA”, January 2021, Federal Supreme Court, Case No 2C_498/2020

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C. SA provides “services, in particular in the areas of communication, management, accounting, management and budget control, sales development monitoring and employee training for the group to which it belongs, active in particular in the field of “F”.   C. SA is part of an international group of companies, G. group, whose ultimate owner is […]

South Africa vs ABC (PTY) LTD, January 2021, Tax Court of Johannesburg, Case No IT 14305

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ABC Ltd is in the business of manufacturing, importing, and selling chemical products. It has a catalyst division that is focused on manufacturing and selling catalytic converters (catalysts) which is used in the abatement of harmful exhaust emissions from motor vehicles. To produce the catalysts, applicant requires, inter alia, some metals known as the Precious […]

Luxembourg vs “Lux Service SA”, December 2020, Higher Administrative Court, Case No 45072

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In August 2020, the competent authority of the Belgian tax administration sent a request for information to the Luxembourg tax administration concerning “Lux Service SA” under the tax convention between Luxembourg and Belgium. The requested information regarding “Lux Service SA” was documentation related to the basis for service payments from a related party in Belgium. […]

Romania vs Impresa Pizzarotti & C SPA Italia, October 2020, ECJ Case C-558/19

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A Regional Court of Romania requested a preliminary ruling from the European Court of Justice in the Case of Impresa Pizzarotti. Impresa Pizzarotti is the Romanian branch of SC Impresa Pizzarotti & C SPA Italia (‘Pizzarotti Italia’), established in Italy. In 2017, the Romanian tax authorities conducted an audit of an branch of Impresa Pizzarotti. […]

Tanzania vs JSC ATOMREDMETZOLOTO (ARMZ), June 2020, Court of Appeal, Appeals No 78-79-2018

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JSC Atomredmetzolo (ARMZ) is a chartered open Joint Stock Company incorporated in the Russian Federation dealing in uranium mining industry. Late 2010, the Company purchased from the Australia Stock Exchange all shares in Mantra Resources Limited (Mantra Resources) a company incorporated in Australia and owner of Mkuju River Uranium project located Tanzania. Following the acquisition […]

Switzerland vs “Contractual Seller SA”, May 2020, Federal Administrative Court, Case No A-2286/2017

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C. SA provides “services, in particular in the areas of communication, management, accounting, management and budget control, sales development monitoring and employee training for the group to which it belongs, active in particular in the field of “F”.   C. SA is part of an international group of companies, G. group, whose ultimate owner is […]

Greece vs “O.P.A.P. PROVISION OF SERVICES S.A.”, February 2020, Supreme Administrative Court, Case No A 320/2020

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The tax authorities had issued a TP adjustment for FY 2013 later than 18 month after initiating an audit of “O.P.A.P. PROVISION OF SERVICES S.A.” “O.P.A.P. PROVISION OF SERVICES S.A.” disagreed with legal basis for the assessment and filed an appeal. Judgement of the Supreme Court The Supreme Court allowed the appeal of “O.P.A.P. PROVISION […]

Czech Republic vs. J.V., May 2019, Supreme Administrative Court, Case No 2 Afs 131/2018 – 59

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For FY 2007, 2008 and 2009, JV had deducted expenses consisting in the payment for services pursuant to invoices issued by BP Property s.r.o. and TOP ZONEVIEW. The services consisted in the provision and implementation of an advertising campaign. Following an audit the tax authorities adjusted JV’s taxable income by the difference found, since pursuant […]

Poland vs A. Sp. z o.o., March 2019, Administrative Court, Case No I SA/Rz 1178/18

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A. Sp. z o.o. was established to carry out an investment project consisting in construction of a shopping center. In order to raise funds, the company concluded a loan agreement. The loan agreement was guaranteed by shareholders and other related parties. By virtue of the guarantees, the guarantors became solitarily liable for the Applicant’s obligations. […]

Poland vs R. Group, September 2018, Administrative Court, Case No III SA/Wa 263/18

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R. Sp. z o.o. had requested a binding ruling/interpretation regarding tax deduction for the price paid to a related entity under restructuring. The request was denied by the tax authorities, as the question – according to the authorities – could only be answered under an Advance Pricing Agreement. R. Sp. z.o.o brought the issue before […]

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

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Reca QuĂ­mica 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 […]

Peru vs “Doc Request SA”, October 2017, Tax Court, Case No 5521-2017

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During an audit for the FY 2010 “Doc Request SA” was requested to submit information and supporting documentation on expense accounts, acquisitions of goods and services, ISC commission accounts paid etc. after the ordinary one-year audit period established by Article 62Âș-A of the Tax Code had already expired. The taxpayer filed a complaint arguing that […]

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 QuĂ­mica, September 2015, Administrative Court, Case No 00147 – 2015 Case File 11-006793-1027-CA

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Reca QuĂ­mica 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 […]

Mexico vs Operadora UnefĂłn, SA de CV, April 2013, Superior Chamber of the Federal Court of Fiscal and Administrative Justice, Case No 14253/08-17-05-3/1259/11-S2-08-04

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A restructuring contract dated 16 June 2003 was entered between NORTEL NETWORKS LIMITED and CODISCO INVESTMENTS LLC and promissory notes were issued by OPERADORA UNEFÓN, S.A. de C.V. Following an audit, an assessment was issued by the tax authorities, where the transaction was recharacterised and priced on an aggregatet basis taking into account the totality […]

Germany vs “Asset management Gmbh”, April 2013, Supreme Administrative Court, Case No I R 45/11

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Asset management Gmbh was a subsidiary of a Luxembourg investment fund management company. The German company paid substantial fees to a Luxembourg service company. Both companies in Luxembourg were wholly-owned by a Luxembourg holding company. Asset management Gmbh was obliged to follow the policies of the fund. These could only be revised by a two-thirds […]

Czech Republic vs. P. S., March 2013, Supreme Administrative Court , Case No 5 Afs 34/2012 – 65

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According to the tax authorities, the prices agreed between the P.S. and her husband, as lessors, and Long Wave, s.r.o. (‘Long Wave’), as lessee, differed from the prices which would have been agreed between independent persons in normal commercial relations under the same or similar conditions. According to the tax authorities, P.S., together with her […]

Italy vs Computer Associates SPA, February 2013, Supreme Court no 4927

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The Italian tax authorities had challenged the inter-company royalty paid by Computer Associates SPA, 30% as per contract, to it’s American parent company, registered in Delaware. According to the authorities a royalty of 7% percentage was determined to be at arm’s length and an assessment for FY 1999 was issued, where deduction of the difference […]

Albania vs “Albanian Chrome” shpk, February 2013, High Court, Case No. 00-2013-465

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The tax authorities had issued an assessment concerning related party transactions of chrome ore, but without consulting or having approval from the Transfer Pricing Commission in the General Directorate of Taxes in the Ministry of Finance. On that basis an appeal was filed by Albanian Chrome sh.pk. Judgement of the High Court The Court set […]

Germany vs “Spedition Gmbh”, December 2012, Federal Tax Court 11.10.2012, I R 75/11

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Spedition Gmbh entered a written agreement – at year-end – to pay management fees to its Dutch parent for services received during the year. The legal question was the relationship between arm’s-length principle as included in double tax treaties and the norms for income assessments in German tax law. The assessment of the tax office […]