Tag: License

Tokyo District Court, judgment of November 24 2017

Tokyo District Court, judgment of November 24 2017

A Japanese company had entered into a series of controlled transactions with foreing group companies granting services and licences to use intangibles – know-how related to manufacturing and sales, training, and provided support by sending over technical experts. The company had used a CUP method to price these transactions based on select “internal comparables”. Tax authorities disagreed with the company and found that the residual profit split method should be applied to price the transactions. The court found the transactions should be aggregated and that the price should be determined for the full packaged deal – not separately for each transaction. The foreign related-party transactions were compared – as a whole – to the comparable transactions selected by the company and the court found that the product lines, how to use them and frequency of dispatching employees to support the foreing group company were not comparable. This could have resulted in differences the value of the intangibles and services provided ... Continue to full case
US vs. Medtronic Inc. June 2016, US Tax Court

US vs. Medtronic Inc. June 2016, US Tax Court

The IRS argued that Medtronic Inc failed to accurately account for the value of trade secrets and other intangibles owned by Medtronic Inc and used by Medtronic’s Puerto Rico manufacturing subsidiary in 2005 and 2006 when determening the royalty payments from the subsidiary. In 2016 the United States Tax Court found in favor of Medtronic, sustaining the use of the CUT method to analyze royalty payments. The Court also found that adjustments to the CUT were required. These included additional adjustments not initially applied by Medtronic Inc for know-how, profit potential and scope of product. The decision from the United States Tax Court has been appealed by the IRS in 2017. US-Memo-2016-112-Medtronic-v.-Commissioner ... Continue to full case
US vs. Guidant Corporation. February 2016

US vs. Guidant Corporation. February 2016

The U.S. Tax Court held in favor of the Commissioner of Internal Revenue, stating that neither Internal Revenue Code §482 nor the regulations thereunder require the Respondent to always determine the separate taxable income of each controlled taxpayer in a consolidated group contemporaneously with the making of the resulting adjustments. The Tax Court further held that §482 and the regulations thereunder allow the Respondent to aggregate one or more related transactions instead of making specific adjustments with respect to each type of transaction. US-vs.-Guidant-Corporation-and-Subsidiares-v.-Commissioner-of-Internal-Revenue ... Continue to full case
South Africa vs. B SA Limited, Aug 2005, Tax Court, Case No. 11454

South Africa vs. B SA Limited, Aug 2005, Tax Court, Case No. 11454

B SA Limited was incorporated in South Africa 9 May 1924. C plc is the controlling shareholder of the company. On 24 October 1979 B SA Limited amended paragraph 1 of its memorandum of association by adding the following to it: The corporate name “B SA Limited” is adopted and used by permission of (C) Limited. On withdrawal of that permission B SA Limited will cease to use such name and will immediately change its corporate name and trading name so that neither includes the mark (B) or any trade mark, trade name, name or other mark of ownership belonging to (C) Company Limited, or any other trade mark, trade name, name or other mark of ownership likely to be confused therewith. During 1996 C plc decided that users of its licensed marks and the licensed marketing indicia should be required to pay a royalty. To this end it commissioned an independent company to determine the value of its licensed ... Continue to full case
France vs. SA Bossard Consultants, March 1998, Adm. Court, no 96pa00673N° 96PA00673

France vs. SA Bossard Consultants, March 1998, Adm. Court, no 96pa00673N° 96PA00673

A subsidiary company, which paid royalties for a licence of a trademark to its parent company, could not deduct part of the sums paid as a temporary increase of the royalties by one point because it could not justify the benefit from the use of the trademark. Click here for translation SA Bossard Consultants, March 1998, Adm. Court, no 96pa00673 ... Continue to full case