In 1996, X BV acquired the right to commercially exploit an intangible asset (Z) for a period of 15 years for $ 63.5 million. X BV then entered into a franchise agreements with group companies for the use of Z, including a Spanish PE of Y BV. According to the franchise agreement Y BV paid X BV a fee.
According to X, in the calculation of the loss carry forward in Spain the franchise fee should not be fully attributed to the PE in Spain due to existing rules on internal roaylties. X states that the loss carry forward amounts to € 13.1 million.
The tax authorities increases the loss carry forward with the fee paid to X, for the use of Z by the Spanish PE. According to the tax authorities, the loss carry forward is € 16.1 million.
The District Court finds that no amount needs to be taken of the fees that Y BV paid to X BV for the use of Z by the Spanish PE. However, the court finds that financing costs have to be taken into account. The District Court sets the total loss carry forward from Spanish PE to € 14 million.
The Supreme Court ruled that the calculation of the District court was not correct. According to the Supreme Court the starting point must be the actual amount paid for the use of Z in Spanish market at the time. It must then be determined which part of the purchase price can be attributed to the use of Z on the Spanish market. Furthermore, the Supreme Court finds that the District Court was right not to take into the fees owed by the Spanish PE to X. The Supreme Court refered the case back to the District Court.
Case No 2016:1031ECLI_NL_HR_2016_1031