Tag: Intra-group services

Services provided by a group company to another affiliated company. The cost of general services such as management, administrative and similar services may be often allocated among the various members of the group without any profit mark-up, whereas services performed in the ordinary course of business are subject to arm’s length conditions.

Finland vs Corp, September 2017, HFD:2017:145

Finland vs Corp, September 2017, HFD:2017:145

Ruling by the Finnish Supreme Administrative Court on enterprise resource planning and intra-group services arrangements. A Oyj had provided its subsidiaries with supply chain services, marketing and brand management services as well as personnel and computer services. The services offered by A Plc mainly consisted in the coordination and harmonization of the Group’s operations. A’s turnover consisted almost exclusively of the service fees received from the sale of these administrative services. As a service charge, A Oyj had charged the amount of the costs incurred in producing the services without the amount of the bonus. On the basis of the tax audit findings, the Tax Administration has added to the taxed income of A plc with ex post taxation and tax corrections to the detriment of the taxpayer the sums equivalent to seven percent payables. The amount of the bonus was established on the basis of a comparison of the Bureau van Dijk Amadeus database with the tax audit. As ... Continue to full case
India vs. Gemplus India Pvt. Ltd. March 2009, ITA case no. 352

India vs. Gemplus India Pvt. Ltd. March 2009, ITA case no. 352

Gemplus India Pvt. Ltd. is a part of the Gemplus group, engaged in providing smart card solutions for the telecommunications industry, financial services industry and other e-businesses. The company entered into a intra group management services agreement for receipt of services in marketing and sales support, customer service support, finance, accounting and administration support and legal support. The tax administration found there was no clear proof that such services had actually been rendered. There was no specific benefit derived by the Indian company. Gemplus India Pvt. Ltd. had not established the benefit of these services and had already incurred expenses towards professional and consultancy services and employed qualified personnel in India for rendering similar services. The Appellate Tribunal decided the case in favour of Revenue. To satisfy the arm’s-length standard, a charge for intra group services or intangibles must at least meet the following conditions: • The need for intra group services or intangibles is established. • The intra group ... Continue to full case