Tag: Internal price list

Portugal vs "FURNITURE S.A." No II, November 2021, CAAD, Case No 604/2021-T

Portugal vs “FURNITURE S.A.” No II, November 2021, CAAD, Case No 604/2021-T

Furniture S.A is engaged in the production and sale of furniture and had established a US subsidiary to market and sell furniture overseas. The pricing of the controlled transactions with the US subsidiary had been based on a resale price method, which resulted in prices amounting to 70% of the list price for the products. The Portuguese tax authority issued an assessment for FY 2015 and 2016, where the pricing of the controlled transaction had been adjusted in accordance with the price list resulting in additional taxable profits. Result reached in the arbitration tribunal. The Tribunal set aside the additional assessment of income in respect of the transfer pricing adjustment. Excerpts “…In the contract concluded with E… the Claimant safeguarded direct sales to large customers (with volume to fill a given number of containers). In practice, despite this safeguard, it is apparent from the evidence produced that the only major customer in the US since then has been E… and, ... Read more
Portugal vs "FURNITURE S.A." No I, November 2021, CAAD, Case No 14/2021-T

Portugal vs “FURNITURE S.A.” No I, November 2021, CAAD, Case No 14/2021-T

Furniture S.A is engaged in the production and sale of furniture and had established a US subsidiary to market and sell furniture overseas. The pricing of the controlled transactions with the US subsidiary had been based on a resale price method, which resulted in prices amounting to 70% of the list price for the products. The Portuguese tax authority issued an assessment, where the pricing of the controlled transaction had been adjusted in accordance with the price list resulting in additional taxable profits. Result reached in the arbitration tribunal. The Tribunal set aside the additional assessment of income in respect of the transfer pricing adjustment. Excerpts “… The application of the principle of comparability must be based on an individual analysis of the transactions, with a view to comparing the conditions practiced in a transaction between related entities and those practiced between independent entities. As it results from the matter of fact given as settled, the creation by the Claimant ... Read more
Poland vs A Sp. z o.o., June 2019, Administrative Court, Case No GD 530/19

Poland vs A Sp. z o.o., June 2019, Administrative Court, Case No GD 530/19

A Polish Subsidiary A SP. z o.o. had incurred a loss in 2012 in the amount of PLN 1,357,333.66 and following an audit the tax authorities issued an assessment whereby the loss was reduced by an amount of PLN 234,019.90. The disputable issue was whether, in the circumstances of the case under consideration, the tax authorities correctly determined the amount of the applicant’s loss for 2012 in an amount other than that resulting from the correction of the declaration due to the finding that the Company undervalued income from transactions concluded with related entities for a total amount of PLN 234,019.90. The Administrative Court dismissed the complaint of A SP z o.o. According the the provided transfer pricing documentation the company had applied a TNMM and determined remuneration based on cost added a fixed percentage of 4% for the parent company, 8% for other companies. Meanwhile, the mark-ups actually applied by the applicant company in transactions concluded with related entities: ... Read more
Italy vs Fashionbox, January 2019, Supreme Court, Case No 14609

Italy vs Fashionbox, January 2019, Supreme Court, Case No 14609

The Italien tax authorities had issued an assessment against Fashion box s.p.a., adjusting revenues for FY 2004 with the sum of EUR 988,888.27, related to transfer pricing transactions between the taxpayer and foreign subsidiaries of Fashion Box Group s.p.a. located in various European countries. In particular, the tax authorities pointed out that sales to the European subsidiaries accounted for 95 % of total sales and that the discounts applied to subsidiaries were 31 % while those offered to Italian shops were between 2 and 2,5 %. The products were sold in Italy for slightly lower prices than those applied to European subsidiaries. Therefore, the subsidiaries could enjoy a much higher profits. An Italian shop had a theoretical mark-up of 138% while the foreign distributor had a mark-up of 233 %. Hence, profits had been transferred to the foreign entities of the group. The Regional Tax Tribunal rejected the assessment. In its judgement the Tribunal stated that it was necessary to ... Read more