Tag: Bonds

Netherlands vs "Tobacco B.V.", October 2022, Rechtbank Noord-Holland, Case No ECLI:NL:RBNHO:2022:8936

Netherlands vs “Tobacco B.V.”, October 2022, Rechtbank Noord-Holland, Case No ECLI:NL:RBNHO:2022:8936

“Tobacco B.V.” is a Dutch company belonging to an international tobacco group. Following an audit an assessment of additional taxable income of €196,001,385, €220,624,304 and €179,896,349 for FY 2008-2010 was issued to “Tobacco B.V.”, and a penalty for non-compliance for FY 2010 of €477,624 was imposed. The dispute focused on whether the fees charged by various group companies for supplies and services had been at arm’s length. To finance their activities, the group companies issued listed bonds under the tobacco group’s so-called EMTN Programme, guaranteed by the parent company in the UK. For this, the claimant paid an annual guarantee fee to the parent company of approximately €35,000,000. Judgement of the court – the guarantee fees are not expenses originating from the “Tobacco B.V.”‘s acceptance of liability for debts of an affiliated company; – the EMTN Programme is not a credit arrangement within the meaning of the Umbrella Credit Judgment (ECLI:NL:HR:2013:BW6520); – the tax authorities has not made it plausible ... Read more
France vs HCL Maître Pierre, September 2022, Conseil d'État, Case No. 455651 (ECLI:FR:CECHR:2022:455651.20220920)

France vs HCL Maître Pierre, September 2022, Conseil d’État, Case No. 455651 (ECLI:FR:CECHR:2022:455651.20220920)

On 1 July 2013, HCL Maître Pierre issued a ten-year bond which were convertible into shares and bore interest at a rate of 12%, the accrued amount of which was capitalised annually until the date of redemption or conversion, together with a non-conversion premium at a rate of 3%, if applicable. This loan was subscribed by its sole partner, (SAS) HGFI Saint-Martin. Following an tax audit of HCL Maître Pierre’s for the financial years ended 31 March 2012, 2013 and 2014, the tax authorities considered that the interest at the rate of 12% could only be deducted at a rate set at 2.82%. Judgement of the Supreme Court The Court dismissed the appeal of HCL Maître Pierre and upheld the assessment issued by the tax authorities. Excerpts “3. It follows from the combination of these provisions that interest relating to sums left or made available to a company by a company which directly or through an intermediary holds the majority ... Read more