A request for an interpretation was submitted by a company in regards to financial transactions (loans and guarantees) with related parties.
The requested interpretation was relevant in determining the amount of the controlled transactions and on that basis whether the taxpayer was required to prepare TP documentation or not.
The company held that in determining the value of a loan transaction, only the value of interest should be taken into account.
The tax authorities held that both the amount of interest and the amount of capital were to be included in amount of the transaction.
Judgement of the Supreme Administrative Court
The Court decided in favour of the tax authorities.
Applying a linguistic interpretation, the court found no support for excluding the capital part of a loan transaction from the amount of the transaction.