Type of court: Administrative Tribunal

Luxembourg vs “Lux PPL SARL”, July 2021, Administrative Tribunal, Case No 43264

Lux PPL SARL received a profit participating loan (PPL) from a related company in Jersey to finance its participation in an Irish company.  The participation in the Irish company was set up in the form of debt (85%) and equity (15%). The profit participating loan (PPL) carried a fixed interest of 25bps and a variable interest corresponding to 99% of the profits derived from the participation in the Irish company, net of any expenses, losses […]

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

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A fully fledged Norwegian distributor in the H group was restructured and converted into a Limited risk distributor. The tax authorities issued an assessment where the income of the Norwegian distributor was adjusted to the median in a benchmark study prepared by the tax authorities, based on the “Transactional Net Margin Method” (TNMM method). Decision of the Tax Board In a majority decision, the Tax Board determined that the case should be send back to […]

Denmark vs. “H Borrower and Lender A/S”, January 2021, Tax Tribunal, Case no SKM2021.33.LSR

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“H Borrower and Lender A/S”, a Danish subsidiary in the H Group, had placed deposits at and received loans from a group treasury company, H4, where the interest rate paid on the loans was substantially higher than the interest rate received on the deposits. Due to insufficient transfer pricing documentation, the tax authorities (SKAT) issued a discretionary assessment of taxable income where the interest rate on the loans had been adjusted based on the rate […]

Sweden vs TELE2 AB, January 2021, Administrative Court, Case No 13259-19 and 19892-19

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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 to MTS. In September 2015, the currency on the existing internal loans to MTS was changed from dollars to KZT. […]

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. The tax administration in Luxembourg contacted “Lux Service SA” and requested submission of the information and documents. Lux Service SA […]

Greece vs “Lender Corp”, March 2020, Court, Case No A 638/2020

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“Lender Corp” had received a loan from a related party for repayment of outstanding dividends to its shareholders. The tax authority disallowed Lender Corp’s interest expenses on the loan. They found that the receipt of the loan was not in compliance with the provisions of paragraph a of Article 22 of Law No. 4172/2013, since the loan capital was not used in the interest of the company. Although the funds were made available for the […]

Greece vs “VSR Inc”, December 2019, Court, Case No A 2631/2019

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At issue was the transfer of taxable assets from a shareholder to a 100% owned company, “VSR Inc”. This transfer of resulted in an understatement of profits in a controlled sale of vehicle scrapping rights. Following an audit, the tax authority concluded that the rights had been acquired in the previous quarter from the one transferred and that a sale value below cost could not be justified. According to the tax authorities the arrangement lacked […]

Greece vs “SH Loan Ltd”, May 2019, Court, Case No A 1780/2019

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“SH Loan Ltd” had provided a loan to its shareholder/manager and claimed that it did not expect any profit (interest) from this transaction, since it was not a bank. The tax authorities issued an assessment where additional interest income was added to the income of the company due to a loan granted to its sole shareholder. The additional interest income for the company was determined based on the relevant interest rates from the Bank of […]

Greece vs “Cyprus Corp”, January 2018, Court, Case No A 1109/2018

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Following an audit of “Cyprus Corp” for FY 2011, the tax authorities found that the intra-group purchases worth 6.363.281,83 € for mechanical and medical equipment from a group company in Cyprus, were overpriced by 3.833.503,78 €. Corporate taxation i Cyprus is significantly lower than in Greece. Hence, the overpricing resulted in the Cyprus Corp having technically increased its (high) tax depreciation in Greece and (low) tax profits in Cyprus, which in combination resulted in a […]

Greece vs “Cyprus Corp”, January 2018, Court, Case No A 417/2018

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Following an audit of “Cyprus Corp” for FY 2011, the tax authorities found that intra-group purchases worth 5.947.034,44 € for mechanical and medical equipment from a related company in Cyprus, were overpriced by 3.693.150,15 €. Corporate taxation i Cyprus is significantly lower than in Greece. Hence, the overpricing resulted in the Cyprus Corp having technically increased its (high) tax depreciation in Greece and (low) tax profits in Cyprus, which in combination resulted in a lower […]

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