Tag: Arm’s length consideration for intangibles

Bulgaria vs Kameniza AD, July 2025, Supreme Administrative Court, Case No 8295 (4999/2025)

Bulgaria vs Kameniza AD, July 2025, Supreme Administrative Court, Case No 8295 (4999/2025)

/ Legal Ownership, Withholding Tax (WHT), Acquisition Price Method (APM), Arm's length consideration for intangibles, Comparable Uncontrolled Price method (CUP), DEMPE, DEMPE functions, Hidden distribution of profits, Retroactive application of law, Risk free return, Risk-free rate of return, Separation of ownership and DEMPE, TPG version, Trademark (trade name), Valuation, Valuation method, Valuation technique, Withholding tax on dividends
A Bulgarian subsidiary acquired the Kameniza trademark from its Dutch parent for EUR 40.1 million, with installment payments made in 2017. The tax authority treated amounts exceeding the arm's length value as hidden profit distributions, imposing 5% withholding tax. Bulgaria's Supreme Administrative Court overturned the lower court's ruling in 2025, confirming that the 2009 acquisition price and OECD DEMPE guidance were legitimate valuation tools, not retroactive law ... Read more