A Czech company deducted costs for advertising and promotional services purchased through two intermediary entities. The tax authority concluded the arrangements were structured to reduce the tax base and applied the CUP method using direct contract prices as references to establish arm's length pricing. The Regional Court ruled in favour of the tax authority in April 2023, upholding the adjustments to the taxpayer's tax base ... Read more

A Polish company selling metal enclosures and boxes to related parties used the cost-plus method in its transfer pricing documentation. The tax authority rejected this approach and applied TNMM, benchmarking EBIT margins over three years to establish additional taxable income of PLN 1.8 million. Poland's Supreme Administrative Court largely upheld the authority's position in 2022, but found the income adjustment incorrectly included transactions not subject to arm's length rules ... Read more

A Polish subsidiary reported a loss of over PLN 1.3 million for 2012, which tax authorities reduced after finding undervalued income from related-party transactions totalling PLN 234,019. The Administrative Court initially dismissed the company's complaint. On appeal, Poland's Supreme Administrative Court overturned the lower court's decision in June 2022 and remanded the case for re-examination, finding the transfer pricing methodology required further scrutiny ... Read more

A Polish company selling metal containers to related parties (95% of turnover) used the cost-plus method in its transfer pricing documentation. The tax authority rejected this approach, applying TNMM and adjusting income using a 3.66% EBIT margin benchmark. The Administrative Court in 2022 confirmed TNMM as the most appropriate method but found the authority had incorrectly applied the adjustment to the company's entire activity rather than only the controlled transactions ... Read more

A Portuguese furniture manufacturer priced sales to its US subsidiary using the resale price method at 70% of list price. The tax authority reassessed FY2015–2016 using list prices as comparables. The CAAD Administrative Tribunal set aside the adjustment in 2021, finding that list prices failed the required comparability analysis and could not serve as valid internal comparables for the controlled transactions ... Read more

A Portuguese furniture manufacturer priced sales to its US subsidiary using the resale price method at 70% of list price. The tax authority substituted the internal price list, raising taxable profits. The CAAD Administrative Tribunal sided with the taxpayer in 2021, finding the authority failed to conduct a proper individual comparability analysis and set aside the transfer pricing adjustment ... Read more

LCN Group deducted costs for marketing services from related parties at prices 23 to 56 times higher than the underlying advertising cost. Czech tax authorities challenged the arm's length nature of these payments. The Regional Court annulled the assessment, finding the comparability analysis insufficient. In 2021, the Supreme Administrative Court reversed that decision and remanded the case to the Regional Court for further examination ... Read more

A Polish manufacturing subsidiary claimed a loss of over PLN 1.3 million in 2012, but tax authorities found that actual mark-ups applied in related-party transactions differed significantly from the documented TNMM rates of 4% and 8%. The company failed to explain the discrepancy. The Administrative Court dismissed the complaint in 2019, upholding the authority's reduction of the declared loss by PLN 234,019.90 ... Read more

The Italian tax authorities adjusted Fashion Box S.p.A.'s revenues for FY 2004, arguing that discounts granted to European subsidiaries were disproportionate compared to those offered to Italian retailers, suggesting profit shifting. The Regional Tax Tribunal and subsequently the Italian Supreme Court ruled in favour of the taxpayer in 2019, finding that the comparison was flawed because retail domestic prices had been incorrectly compared with wholesale prices charged to foreign subsidiaries ... Read more