A Spanish subsidiary of a multinational consumer goods group was audited for 2015–17 over contract manufacturing services, intra-group loans, and cash pooling arrangements. The tax authority rejected part of the taxpayer's comparable set and adjusted margins to the median, also applying group credit ratings and substituting Euribor with Eonia. Spain's TEAC largely upheld the authority's position in its October 2025 ruling ... Read more

A Dutch fertiliser company appealed a tax assessment imposing over €78 million in additional taxable income for FY 2012. The Netherlands Court of Appeal upheld the tax authority's approach to allocating debt and equity capital to a Libyan permanent establishment under Article 7, confirming the head office creditworthiness as the correct starting point. The court also ruled that dollar-denominated claims and liabilities could not be automatically grouped for hedging purposes ... Read more

The following examples illustrate an important element of the definition of low value-adding intra-group services, namely, that they should not include services which are part of the MNE’s core business. Services that may seem superficially similar in nature (in the example, credit risk analysis) may or may not be low value-adding intra-group services depending on the specific context and circumstances. The examples also illustrate the point that services may not qualify as low value-adding intra group services because in their specific context they create significant risk or unique and valuable intangibles. a) Company A, situated in country A, is a shoe manufacturer and wholesale distributor of shoes in the North-West region. Its wholly-owned subsidiary B, situated in country B, is a wholesale distributor in the South-East region of the shoes manufactured by A. As part of its operations, A routinely performs a credit risk analysis on its customers on the basis of reports purchased from a credit reporting agency. A ... Read more

Lender GmbH financed a share acquisition using an unsecured subordinated shareholder loan at 8% interest from its sole shareholder. German tax authorities argued only 5% was arm's length, treating the excess as a hidden profit distribution. The Bundesfinanzhof ruled mostly in favour of the taxpayer in May 2021, finding comparability defects in the lower court's analysis and remanding the case for re-examination ... Read more

A Dutch fertilizer group challenged a 2016 tax assessment imposing €162 million in additional taxable income for FY 2012. The District Court upheld the tax authority's position, allocating 75% equity and 25% loan capital to a permanent establishment in a foreign country. The court also ruled that USD-denominated deposits and loans were only partly connected for valuation purposes, largely deciding in favour of the tax authority ... Read more

The following examples illustrate an important element of the definition of low value-adding intra-group services, namely, that they should not include services which are part of the MNE’s core business. Services that may seem superficially similar in nature (in the example, credit risk analysis) may or may not be low value-adding intra-group services depending on the specific context and circumstances. The examples also illustrate the point that services may not qualify as low value-adding intra group services because in their specific context they create significant risk or unique and valuable intangibles. a) Company A, situated in country A, is a shoe manufacturer and wholesale distributor of shoes in the North-West region. Its wholly-owned subsidiary B, situated in country B, is a wholesale distributor in the South-East region of the shoes manufactured by A. As part of its operations, A routinely performs a credit risk analysis on its customers on the basis of reports purchased from a credit reporting agency. A ... Read more

A Portuguese company charged 13% fixed annual interest on a €47.6 million intra-group loan to a Luxembourg borrower. The tax authority reduced the rate to 5.6%, arguing implicit group support eliminated credit risk. The CAAD tribunal disagreed, finding the 13% rate complied with the arm's length principle following proper credit risk analysis and benchmarking against market comparables, ruling in favour of the taxpayer in 2017 ... Read more