Tag: EU Merger Directive

On 23 July 1990 the Council adopted Directive 90/434/EEC on a common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States (the Merger Directive). The objective of the Merger Directive is to remove fiscal obstacles to cross-border reorganisations involving companies situated in two or more Member States. The Merger Directive includes a list of the legal forms to which it applies. The companies must be subject to corporate tax, without being exempted, and resident for tax purposes in a Member State.
Directive 2005/19/EC amending the Merger Directive adds new legal entities to this list annexed to the initial Directive and to which it applies. It also extent the coverage to a new type of transactions known as a split off and introduces specific provisions providing relief on the conversion of branches into subsidiaries.

Sweden vs Flir Commercial Systems AB, January 2022, Administrative Court of Appeal, Case No 2434–2436-20

Sweden vs Flir Commercial Systems AB, January 2022, Administrative Court of Appeal, Case No 2434–2436-20

/ 2008 Report on Attribution of Profits to PEs, Abuse of law , Administrative Court of Appeal, Arm's length principle, Article 13, Article 7, Authorised OECD Approach (AOA), Belgium, Binding ruling, Business Restructuring, Business restructuring, Commentary to the OECD Model Tax Convention, Dealing, Decision in favor of tax authority, EU Merger Directive, Intangibles - Goodwill Know-how Patents, Notional deduction, Penalty/Fine, Significant people functions, Sweden, Tax Avoidance Schemes, Tax treaty interpretation, Valuation - DCF and CUT/CUPs, Valuation of intangibles
In 2012, Flir Commercial Systems AB sold intangible assets from a branch in Belgium and subsequently claimed a tax relief of more than SEK 2 billion in fictitious Belgian tax due to the sale. The Swedish Tax Agency decided not to allow relief for the Belgian “tax”, and issued a tax assessment where the relief of approximately SEK 2 billion was denied and a surcharge of approximately SEK 800 million was added. An appeal was filed with the Administrative Court, In March 2020 the Administrative Court concluded that the Swedish Tax Agency was correct in not allowing relief for the fictitious Belgian tax. In the opinion of the Administrative Court, the Double tax agreement prevents Belgium from taxing increases in the value of the assets from the time where the assets were owned in Sweden. Consequently, any fictitious tax cannot be credited in the Swedish taxation of the transfer. The Court also considers that the Swedish Tax Agency was correct ... Read more