Poland vs “K-steel S.A.”, March 2012, Supreme Administrative Court, Case No II FSK 1882/10

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Category: Marketing and Procurement Hubs, Options Realistically Available | Tag: , , , , , ,
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K-steel S.A. purchased steel from its parent company which again purchased steel from unrelated steel mills.

The tax authorities found that prices paid to the parent company by “K-steel S.A.” were not arm’s-length. The arm’s length price was established based on the prices paid for similar steel products by unrelated companies active in similar business activities. According to the tax authorities, purchasing steel directly from manufacturers would be a better alternative in terms of prices.

Judgment of the Court

The Court found that the authorities correctly established that arm’s-length prices were not applied and dismissed the appeal of “K-steel S.A.”.

According to the court, a option realistically available for the taxpayer, and at the same time cheaper, would be to purchase the goods in question directly from steel mills, without the participation of the parent.

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Related Guidelines

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