Ecuador vs JFC Ecuador S.A., November 2014, National Court, Case No. 488-2012

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JFC Ecuador is active in coordination and logistic operations for the transfer of Ecuadorian fruit to related parties in the Russian JFC Group.

Following an audit the tax authorities issued an assessment where the prices of these transactions had been determined based on quoted prices issued by the authorities in the SOPISCO NEWS database.

However, according to JFC Ecuador, SOPISCO NEWS does not correspond to a publicly available international trade exchange or price database. On the contrary, it is a bulletin that lists quotations that involve price estimates, established through unidentified sources. The price quotations listed by SOPISCO NEWS correspond to prices that the bulletin presumes were agreed upon by companies that have carried out the management and marketing and sales for the placement of the product, while JFC Ecuador did not carry out such activities.

Judgment of the Court

The Court concludes that the use of the SOPISCO NEWS database by the Tax Administration, as it is an internationally recognized source of price information used by international organizations as a source of information, is appropriate depending on the method applied. In conclusion, this Chamber considers that the Tax Administration acted in accordance with its determining power as set forth in Article 68 of the Tax Code and Article 23 of the Internal Tax Regime Law, and that its acts are subject to the presumption of legitimacy and enforceability as set forth in Article 82 of the same law…”.

 

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488-2012

TP-Guidelines

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