A Swiss pharmaceutical company was assessed by the Portuguese Tax Authority for corporate income tax on the basis that its wholly owned Portuguese subsidiary constituted a dependent agent permanent establishment. The Authority attributed profits using VAT return data without performing a transfer pricing analysis. Portugal's Central Administrative Court ruled in favour of the taxpayer in 2025, rejecting the permanent establishment characterisation and the resulting profit attribution ... Read more

A French manufacturer sold products abroad through both subsidiaries and independent agents. The tax authority applied an internal CUP, using commissions paid to independent agents as a benchmark for subsidiary remuneration. SAS Sames Kremlin argued that subsidiaries performed greater functions and operated in different markets. The Paris Administrative Court of Appeal dismissed the appeal in 2023, upholding the transfer pricing adjustment and finding the taxpayer had not discharged its burden of proof ... Read more

A Danish software distributor was converted into a commissionaire for a Swiss hub in 2010. The Danish tax authorities assessed additional income using a DCF model for undocumented intangibles transferred during the restructuring. The Tax Court rejected a discretionary assessment but confirmed that valuable intangibles had been transferred, applying the DCF model with a 10-year useful life rather than an indefinite period, largely upholding the tax authority's position ... Read more

The Guideline outlines ATO’s compliance approach to the transfer pricing outcomes associated with the following activities of inbound distributors: distributing goods purchased from related foreign entities for resale, and distributing digital products or services where the intellectual property in those products or services is owned by related foreign entities Such activities, together with any related activities involving the provision of ancillary services, are referred to in this Guideline as ‘inbound distribution arrangements’. This Guideline applies to inbound distribution arrangements of any scale. The framework in the Guideline is used to assess the transfer pricing risk of inbound distribution arrangements and tailor our engagement with you. Where this Guideline applies, we rate the transfer pricing risk of your inbound distribution arrangements having regard to a combination of quantitative and qualitative factors. If an inbound distribution arrangements fall outside the low transfer pricing risk category, the transfer pricing outcomes of the arrangements can be expected to be monitor, tested and/or verified. The ... Read more

Microsoft Denmark's tax authority argued that OEM sales of pre-installed software to Danish end users should have been included in calculating the company's local marketing commissions under its agreement with Microsoft Ireland Operations Limited. In a close 3-2 decision, the Danish Supreme Court ruled in favour of Microsoft, finding the tax authorities had not met the burden of proof required to justify a discretionary reassessment of the transfer pricing arrangement ... Read more

A UK sea carriage commissionaire contracted a French company to organise and sell transport services under its name. The French tax authority argued this arrangement created a VAT permanent establishment in France. The French Supreme Court agreed in April 2018, finding the French company had sufficient substance and independence to constitute a permanent establishment, exposing the UK company to French VAT obligations ... Read more

Danish tax authorities assessed Microsoft Denmark DKK 308 million, arguing the company had not been properly remunerated for marketing activities because OEM sales to Danish customers were excluded from local commission calculations. Microsoft argued for dismissal, citing similar cases lost or dropped by Sweden, Norway, and Finland. The Danish Court of Appeal ruled in favour of Microsoft in 2018, a decision later confirmed by the Supreme Court ... Read more

Dell Spain acted as a commissionaire for Dell Ireland following a business restructuring from full-fledged distributor. Spain's tax authority assessed that Dell Spain constituted a permanent establishment of Dell Ireland for FY 2001–2003. The Supreme Court agreed, finding the dependent agent and fixed place of business thresholds both met, holding that a commissionaire can bind a principal without a direct legal agreement with the third party ... Read more

Gap International Sourcing, an Indian entity providing procurement support services to Gap group companies, was challenged by India's tax administration, which recharacterised its functional profile and substituted a 5% commission on sourced goods for the cost-plus 15% fee. The Income Tax Appellate Tribunal in 2016 ruled largely in favour of the tax authority, emphasising that functional analysis and proper risk characterisation are essential in determining the arm's length price ... Read more

A French subsidiary of Microsoft was converted from a distributor into a sales agent of its Irish sister company, reducing its commission rate from 25% to 18%. French tax authorities challenged the reduction using a benchmarking study, arguing profits had been transferred abroad. The French Court of Appeals sided with the taxpayer in 2012, finding that a reduced commission rate alone does not prove profit transfer and that the tax authority's comparables were inappropriate and unreliable ... Read more

Following a 1999 business restructuring, Roche Vitaminas S.A. was converted from a full-fledged distributor into a contract manufacturer and commission agent for Swiss parent Roche Vitamins Europe Ltd. The Spanish tax authorities challenged the arrangement, arguing it created a permanent establishment under the Spain-Switzerland tax treaty. Spain's Supreme Court agreed, ruling that profits from both manufacturing and distribution activities should be attributed to Spain under Article 7 of the DTT ... Read more

An Irish Dell entity sold PCs through a Norwegian commissionaire under a limited-risk distributor arrangement. Norwegian tax authorities argued Dell Products had a permanent establishment in Norway under the Ireland-Norway tax treaty. The Supreme Court disagreed, ruling in 2011 that Article 5.5 requires the agent to legally bind the principal to customers, which Dell AS did not do, finding no permanent establishment existed ... Read more

Zimmer SAS, a French company converted from a distributor into a commissionaire in 1995, was challenged by French tax authorities who argued it constituted a permanent establishment of UK principal Zimmer Ltd. The Conseil d'État ruled in favour of the taxpayer, finding that the commissionaire lacked authority to legally bind the principal and therefore could not be treated as its permanent establishment ... Read more