Legal issue: Local tax regulations

Germany vs “C GmbH”, June 2022, Finanzgericht Köln, Case No 10 K 1406/18

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In 2014 a profit transfer agreement was effectively concluded between the plaintiff, C GmbH (controlled company), and its sole shareholder A. The profits to be transferred and interest to be paid for the disputed years 2009-2011 were subsequently booked to a “liabilities to shareholders” clearing account, but counterclaims or lump sum payments were not booked. […]

Costa Rica vs British Tobacco Centroamérica S.A. March 2022, Supreme Court, Case No 750-2022

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The tax authorities had started investigating a sales contract that British Tobacco Centroamérica S.A. had with a related company abroad for the import of goods. The historical price of the imported goods was compared to the price contained in the later sales contract. In the customs forms, the company declared one value, but in its […]

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 Alta Energy Luxembourg S.A.R.L., November 2021, Supreme Court, Case No 2021 SCC 49 – 2021-11-26

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ALTA Energy, a resident of Luxembourg, claimed an exemption from Canadian income tax under Article 13(5) of the Canada-Luxembourg Income Tax Treaty in respect of a large capital gain arising from the sale of shares of ALTA Canada, its wholly-owned Canadian subsidiary. At that time, Alta Canada carried on an unconventional shale oil business in […]

Colombia vs Petroleum Exploration International Sucursal Colombia S.A., November 2021, The Administrative Court, Case No. 25000-23-37-000-2016-01988-01(24028)

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Article 260-8 of the Colombian Tax Statute established which taxpayers were obliged to file Transfer pricing documentation. The rule established two requirements for income taxpayers to be obliged to file DIIPT in the year 2010, the first is to have obtained a gross equity on 31 December of the taxable period of 100.100,000 UVT ($2,455,500,000) […]

Kenya vs Dominion Petroleum Dkenya Ltd, November 2021, High Court of Kenya, TAX APPEAL NO. E093 OF 2020

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Dominion Petroleum Dkenya’s principal activity was exploration of oil and gas. The tax authorities carried out an in-depth audit of Dominion’s operations and tax affairs for the years of income 2011 to 2016, which resulted in the following taxes being raised: Withholding Income Tax (WHT) on imported services – KES 114,993,666.00; WHT on deemed interest […]

Colombia vs Interoil Colombia Exploration and Production S.A., September 2021, The Administrative Court, Case No. 24282

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Interoil Colombia Exploration and Production S.A. paid it foreign parent for cost related to exploration and administrative services, and for tax purposes these costs had been deducted in the taxable income. In total $3,571,353,600 had been declared as operating expenses for geological and geophysical studies carried out in the exploratory phase of an oil project […]

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 […]

Czech Republic vs D. D. D. SERVIS OPAVA v. o. s., January 2021, Regional Court in Ostrava, Case No 22 Af 42/2019- 36

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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 Q. F. sp. z o.o., January 2021, Supreme Administrative Court, Case No II FSK 2514

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A request for an interpretation was submitted by a company in regards to financial transactions (loans and guarantees) with related parties. The requested interpretation was relevant in determining the amount of the controlled transactions and on that basis whether the taxpayer was required to prepare TP documentation or not. The company held that in determining […]

Spain vs Stavelot Comunicación S.L., May 2020, Tribunal Supremo, Case No 446/2020, STS 951/2020 – ECLI:EN:TS:2020:951

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In the case at hand a related-party transactions had been carried out between a person (shareholder) and a related company. The transaction took place in 2007 and 2008 and was exempt from Spanish transfer pricing documentation requirements. The tax authorities issued an assessment where the transfer pricing had been adjusted and a penalty/fine was added […]

Greece vs S.p.A. ST. MEDICAL, May 2020, Supreme Administrative Court, Case No A 984/2020

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Following an audit the tax authorities issued a tax assessment and a substantial fine to S.p.A. ST. MEDICAL related to costs deducted in FY 2009, which the tax authorities claimed were partially fictitious. “the Economic Police carried out, on 22.10.2012, a tax audit of the appellant, which, during the contested management period (1.1.-31.12.2009), had as […]

Tanzania vs Aggreko International Projects Ltd, June 2019, Court of Appeal, Case No 148 of 2018

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Aggreko International Projects (AIP branch) operates in Tanzania as a branch of Aggreko International Projects Limited, a UK company engaged in generation of emergency/temporary power, and working mainly with Tanzania National Electricity Supply Company Limited (TANESCO) as the main customer. In FY 2011 to 2012, the head office provided a number of services for which […]

Spain vs Representaciones Creta S.L., October 2018, Tribunal Supremo, Case No 1504/2018, STS 3632/2018 – ECLI:ES:TS:2018:3632

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Tax penalties/fines had been issued following a transfer pricing adjustments in regards of controlled transactions exempt from Spanish TP documentation requirements. An appeal was filed by the taxpayer claiming to be excluded from the Spanish penalty regime. The appeal was dismissed by the lower courts. Judgement of the Supreme Court The Supreme Court upheld the […]

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 62º-A of the Tax Code had already expired. The taxpayer filed a complaint arguing that […]

Brazil vs Syngenta Protecao de Cultivos LTDA, September 2016, CARF Case No 16561.000199/2008­16

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Syngenta had been issued a tax assessment related to two tax violations: (1) incorrect ascertainment of the PRL 60, in disagreement with IN SRF no. 243, of 2002, in the ascertainment of transfer prices, and (2) omission of revenues arising from inventory differences. Syngenta filed an opposition claiming (1) illegality of IN SRF 243, of […]

Brazil vs LG Electronics Do Brasil LTDA., May 2016, Superior Chamber of Tax Appeals, Case No 9101-002.323

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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 where the tax authorities rejected the pricing method chosen by LG Electronics. An appeal was filed by LG Electronics with the Court of Appeals […]

Italy vs F. S.p.A., February 2016, Regional Tax Commission, Case No 02/02/2016 n. 258/11

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The Provincial Tax Commission had upheld F. S.p.A.’s appeal and set aside the assessment made by the tax authorities, both because it had failed to prove tax avoidance and because it had used the TNMM (Transactional Net Margin Method) method, which the tax authorities advised against in favour of the CUP (Comparable Uncontrolled Price) method, […]

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 […]

Poland vs “H-trademark S.A.”, February 2012, Administrative Court, Case No I SA/Po 827/11

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“H-trademark S.A.” applied for a ruling on the tax rules governing a business restructuring where trademarks were transferred to another group company and licensed back – whether Polish arm’s length provisions would apply to the transaction. The company was of the opinion that Polish arm’s length provision (article 11) would not apply, since the arrangement […]