Tag: Lower quartile

Spain vs Ikea, March 2019, Audiencia Nacional (TEAC), Case No SAN 1072/2019

Spain vs Ikea, March 2019, Audiencia Nacional (TEAC), Case No SAN 1072/2019

The tax administration had issued an adjustment to the taxable profit of IKEA’s subsidiary in Spain considering that taxable profit in years 2007, 2008, and 2009 had not been determined in accordance with the arm’s length principle. In 2007 taxable profits had been below the interquartile range and in 2008 and 2009 taxable profits had been within the interquartile range but below the median. In all years taxable profits had been adjusted to the median found in the benchmark study. With respect to 2007 where the profit had been outside the interquartile range, the court held that profits should be adjusted to the lower quartile instead of the median, as argued by the tax administration. The tax administration had not demonstrated comparability defect in the comparability study provided by the taxpayer that justified using the median in the assessment of the arm’s length profit. For 2008 and 2009 where the taxable profit had been within the interquartile range – but ... Continue to full case