Type of court: Tax Court

US vs Medtronic, August 2022, U.S. Tax Court, T.C. Memo. 2022-84

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Medtronic had used the comparable uncontrolled transactions (CUT) method to determine the arm’s length royalty rates received from its manufacturing subsidiary in Puerto Rico for use of IP under an inter-group license agreement. The tax authorities found that Medtronic left too much profit in Puerto Rico. Using a “modified CPM” the IRS concluded that at […]

Greece vs “Clothing Distributor Ltd.”, June 2022, Tax Court, Case No 2400/2022

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Following an audit, the Greek tax authorities determined that the remuneration of a Greek Clothing Distributor had not been determined in accordance with the arm’s length principle. On that basis an upwards adjustment of the taxable income was issued. An appeal was filed by “Clothing Distributor Ltd.” Judgement of the Court The court dismissed the […]

Korea vs “Semicon-sales”, June 2022, Tax Court, Case No 2020-서-2311

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A Korean subsidiary (“Semicon-sales”) of a foreign group was active in distribution and sales of semiconductors for the automotive and industrial industry. Following an audit, the tax authorities found that the subsidiary had purchased semiconductors from a foreign affiliated company at a higher price than the arm’s length price. An assessment was issued where the […]

Austria vs “Lamps AG”, June 2022, Bundesfinanzgericht, Case No RV/7102082/2021

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“Lamps AG” had various transactions with related parties. These included outstanding trade receivables from a sister company for which no interest was charged, product transactions for which the price had been adjusted, and guarantee commissions paid to the parent company in connection with a shareholder loan. Following an audit, the tax authorities issued a notice […]

India vs Olympus Medical Systems India Pvt. Ltd., April 2022, Income Tax Appellate Tribunal – New Delhi, Case No 838/DEL/2021

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Olympus Medical Systems India is a subsidiary of Olympus Corp and engaged in the import, sale and maintenance of medical equipment in India. For FY 2012 and 2013 the company reported losses. An transfer pricing audit was initiated by the tax authorities and later an assessment was issued. Since Olympus India had failed to provide […]

India vs UPS Asia Group Pte. Ltd., March 2022, Income Tax Appellate Tribunal – Mumbai, Case No 220/Mum./2021

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UPS Asia is a company incorporated under the laws of Singapore and is engaged in the business of provision of supply chain management including the provision of freight forwarding and logistic services. In 2012 UPS Asia had entered into a Regional Transportation Services Agreement with UPS SCS (India) Pvt. Ltd. for the provisions of freight […]

India vs Kellogg India Private Limited, February 2022, Income Tax Appellate Tribunal – Mumbai, Case NoITA No. 7342/Mum/2018

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Kellogg India Private Limited is engaged in manufacturing and sales of breakfast cereals and convenience foods and it operates as a licensed manufacturer under the Kellogg brand. During the year under consideration, Kellogg India had commenced business of distributing Pringles products in the Indian markets. Kellogg India purchases the pringles product from its AE Pringles […]

US vs TBL LICENSING LLC, January 2022, U.S. Tax Court, Case No. 158 T.C. No 1 (Docket No. 21146-15)

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A restructuring that followed the acquisition of Timberland by VF Enterprises in 2011 resulted in an intra-group transfer of ownership to valuable intangibles to a Swiss corporation, TBL Investment Holdings. The IRS was of the opinion that gains from the transfer was taxable. Judgement of the US Tax Court The tax court upheld the assessment […]

Greece vs “Marine Fuel Ltd”, January 2022, Dispute Settlement Board, Case No 36/2022

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“Marine Fuel Ltd” was audited for FY 2015 and an assessment was issued by the tax authorities, where the taxable income had been increased due to a transfer pricing adjustment. The tax authorities had dismissed the CUP method chosen by the group and instead applied the transactional net margin method (TNMM). Not satisfied with the […]

Panama vs “Construction S.A.”, December 2021, Administrative Tax Court, Case No TAT- RF-111 (112/2019)

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“Construction Service S.A.” is active in Design, Repair and Construction of buildings. During the FY 2011-2013 it paid for services – management services and construction services – rendered from related parties. Following an audit the tax authorities issued an assessment where payments for these services had been adjusted by reference to the arm’s length principle. […]

Portugal vs “Welding Mesh SA”, December 2021, CAAD Tax Arbitration, Case No 194/2021-T

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A Portuguese subsidiary – A SA – had received intra group loans in foreign currency and had various other transactions with foreign group companies. The tax authorities claimed that the pricing of the transactions had not been at arm’s length and that the interest payment and exchange losses on the loans were not tax deductible. […]

India vs Times Infotainment Media Ltd, August 2021, Income Tax Appellate Tribunal – Mumbai, TIA No 298/Mum/2014

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Times Infotainment Media Ltd (TIML India), is in the entertainment business, including running an FM Broadcasting channel in India. It successfully participated in the auction of the radio business of Virgin radio in March 2008 in the United Kingdom. To complete the acquisition, it acquired two SPV companies, namely TML Golden Square Limited and TIML […]

Panama vs “Pharma Distributor S.A.”, July 2021, Administrative Tax Court, Case No TAT-RF-066

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An adjustment for FY 2013 and 2014 had been issued to a pharmaceutical company in Panama “Pharma Distributor S.A” that resulted in an income adjustment of 19.5 million dollars, which in turn resulted in additional taxes of 2.4 million dollars. The resale price method had been used by Pharma Distributor S.A. to determine the market […]

India vs Sabic India Pvt Ltd, June 2021, Income Tax Appellate Tribunal – Delhi, ITA No.454/Del/2021

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Sabic India Pvt Ltd was primarily engaged in providing marketing support services to facilitate the selling of fertilizers and chemicals in India on behalf of the Sabic Group holding company. The Indian company did not hold any title to inventories and all products sold were directly invoiced to the holding companies of the taxpayer. To […]

Philippines vs Snowy Owl Energy Inc, March 2021, Tax Court, CTA CASE No. 9618

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In 2013, Snowy Owl Energy Inc entered into a Consultancy Agreement (Subconsultant Services Agreement) with Rolenergy Inc. – a Hong Kong-based corporation organized and registered in the British Virgin Islands. Based on the Agreement, Rolenergy would serve as Snowy Owl Energy Inc’s sub-consultant. The tax authorities issued an assessment for deficiency income tax (IT), final […]

Portugal vs “B Restructuring LDA”, February 2021, CAAD, Case No 255/2020-T

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B Restructuring LDA was a distributor within the E group. During FY 2014-2016 a number of manufacturing entities within the group terminated distribution agreements with B Restructuring LDA and subsequently entered into new Distribution Agreements, under similar terms, with another company of the group C. These events were directed by the Group’s parent company, E. […]

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 […]

Portugal vs “A-Contract Manufacturer LDA”, December 2020, CAAD Tax Arbitration, Case No 808/2019-T

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A-Contract Manufacturer LDA is an entity residing in Portugal, whose main activity is contract manufacturing of coffee machines and irons, as well as spare parts, tools etc. on behalf of its German parent B A.G. Following an audit, the tax authorities found that the results of A-Contract Manufacturer LDA had not been at arm’s length. […]

Panama vs X S.A., September 2020, Administrative Tax Court, Case No TAT-RF-065

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An assessment was issued where the tax administration denied the application treaty benefits, understanding that the dividends distributed by X S.A. a company with tax residence in Panama, to its shareholder NL Corp in the Netherlands did not qualify for the reduced rate provided for in the DTA because the latter was not the “beneficial […]

Greece vs “G Pharma Ltd”, july 2020, Tax Court, Case No 1582/2020

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“G Pharma Ltd” is a distributor of generic and specialised pharmaceutical products purchased exclusively from affiliated suppliers. It has no significant intangible assets nor does it assume any significant risks. However for 17 consecutive years it has had losses. Following an audit, the tax authorities issued an assessment, where the income of G Pharma Ltd […]

Peru vs. “P Services”, July 2020, Tax Court, Case No 03052-5-2020

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“P Services! provided services to a Peruvian consortium. In 2014, the parties entered into an interest-free loan agreement. According to the loan agreement, payment for the services performed in 2013 was going to be offset against the funds received under the agreement. The tax authorities found that the “loan arrangement”, in reality constituted advances for […]

Uganda vs East African Breweries International Ltd. July 2020, Tax Appeals Tribunal, Case no. 14 of 2017

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East African Breweries International Ltd (applicant) is a wholly owned subsidiary of East African Breweries Limited, and is incorporated in Kenya. East African Breweries International Ltd was involved in developing the markets of the companies in countries that did not have manufacturing operations. The company did not carry out marketing services in Uganda but was […]

Zimbabwe vs LCF Zimbabwe LTD, March 2020, Special Court for Income Tax Appeals, Case No. HH 227-20

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LCF Zimbabwe LTD manufactures cement and similar products from limestone extracted at a mine in Zimbabwe. It also manufactures adhesives and adhesive paints and decorative paints, construction chemicals and agricultural lime. It is a wholly owned subsidiary of a large European group, which manufactures and sells building and construction materials. The issues in this case […]

India vs Amphenol Interconnect India Pvt. Ltd., May 2019, Income Tax Appellate Tribunal, Case No ITA No.641/PUN/2017

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According to Amphenol Interconnect the TNMM was the most appropriate method for determining the arm’s length price in respect of exports and import of goods from the related parties. And since the net profit margin of Amphenol was comparable to the net profit margin of the comparable companies, the transactions were at arm’s length. The […]

Italy vs BI S.r.l, November 2018, Tax Tribunal of Milano, Case no. 5445/3/2018

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The Italian tax authorities had issued an assessment against a local distribution company of a multinational group, where the transfer pricing analysis conducted by the taxpayer had been disregarded. The tax authorities, carried out a new benchmark analysis based on the transactional net margin method (“TNMM”) and adjusted the company’s profitability to the median. Judgement […]

India vs Amphenol Interconnect India (Private) Ltd., March 2018, Bombay High Court, case no. 536

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In the case of Amphenol Interconnect the issue was whether two transactions – the resale of goods and sales assistance services for a commission – could be aggregated for transfer pricing purposes and whether the CUP method or the TNMM was the most appropriate transfer pricing method. The court found that that the CUP Method […]

Panama vs Banco Bilbao Vizcaya Argentaria (Panama), S.A., November 2017, Administrative Tax Court, Case No TAT-RF-087

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In this case the Tax Court analyses the application of clause 10 (2) of the DTA between Panama and Luxembourg. The case originated in an assessment issued 26 November 2014 by the Directorate General of Revenue through which the tax administration denied the application of the aforementioned clause, understanding that the dividends distributed by Banco […]

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 […]

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 […]

India vs Herbalife International India , April 2017, Income Tax Appellate Tribunal – Bangalore, IT(TP)A No.924/Bang/2012

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Herbalife International India is a subsidiary of HLI Inc., USA. It is engaged in the business of dealing in weight management, food and dietary supplements and personal care products. The return of income for the assessment year 2006-07 was filed declaring Nil income. The Indian company had paid royalties and management fees to its US […]

Tanzania vs. AFRICAN BARRICK GOLD PLC, March 2016, Tax Revenue Appeals Tribunal, Case No. 16 OF 2015

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AFRICAN BARRICK GOLD PLC (now Acacia Mining Plc), the largest mining company operating in Tanzania, was issued a tax bill for unpaid taxes, interest and penalties for alleged under-declared export revenues from the Bulyanhulu and Buzwagi mines. Acacia Mining was accused of operating illegally in the country and for tax evasion. Decision of the Tax […]

Indonesia vs P.T. Sanken Electric Indonesia Ltd, February 2016, Tax Court, Case No. Put.68357/PP/M.IA/15/2016

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P.T. Sanken Electric Indonesia Ltd. – an Indonesian subsidiary of Sanken Electric Co., Ltd. Japan – paid royalties to its Japanese parent for use of IP. The royalty payment was calculated based on external sales and therefore did not include sales of products to group companies. The royalty payments were deducted for tax purposes. The […]

India vs. Adaptec (India) P. Ltd., March 2015, Income Tax Appellate Tribunal, ITA.No. 206/Hyd/2014

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Adaptec. Ltd. is engaged in the business of software, design and development and testing in the field of storage solutions. It filed its tax return declaring income of Rs.89,51,330. Since assessee is functioning as service provider to it’s group parent on cost + 10% margin basis. Following an audit, the tax authorities selected 17 comparable […]

Indonesia vs Sharp Semiconductor Indonesia, December 2013, Tax Court, Put.49339/2013

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In the case of Sharp Semiconductor Indonesia the tax authorities had disallowed deductions for royalties paid by the local company to the Japanese Sharp Corporation. Judgement of the Tax Court The court decided predominantly in favour of the tax authorities. According to the court Sharp Semiconductor Indonesia had not been able to prove the existence […]

India vs Sona Okegawa Precision Forgings Ltd., November 2011, Income Tax Appellate Tribunal, Case No. ITA No. 5386/Del/2010

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In this case royalty payments from Sona Okegawa Precision Forgings Ltd. – a contract manufacturer in India – had been disallowed by the tax authorities. The tax authorities “had analyzed this transaction and observed that assessee manufactured the goods and sold those goods to the AE. These goods are specific goods which have been produced […]

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 […]

Philippines vs Avon Products MFG., INC., January 2005, Tax Court, CTA CASE No. 5908

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Avon Products exported products to related parties at lower price than charged when sold domestically. The tax authorities issued an assessment where the export prices had been adjusted. Judgement of the Tax Court The Court decided in favour of Avon Products. According to the court the initial burden to prove that the pricing of inter-company […]

Philippines vs CYANAMID PHILIPPINES, INC, August 1995, Tax Court, CTA CASE No. 4724

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Cyanamid Philippines, INC was engaged in the marketing of various products in the areas of pharmaceutical, animal health and nutrition, and crop protection chemicals as well as medical devices. The tax authorities issued an assessment for deficiency income tax, arising from (a) overstatement of cost of goods due to transfer pricing of products, namely; aurofac and […]