Tag: Market practices

Customary commercial conduct and industry norms used as benchmarks when evaluating whether intra-group pricing reflects arm’s length terms. Tax authorities challenge arrangements where internal agreements deviate from prevailing market conventions, particularly in commodity and natural resource sectors.

Norway vs Equinor Energy AS, August 2022, Court of Appeal, Case No LB-2021-126759

Norway vs Equinor Energy AS, August 2022, Court of Appeal, Case No LB-2021-126759

/ Commodity Transactions, Transfer Pricing Methods, Change of method, Change of transfer pricing method, Commodities, Comparable Uncontrolled Price method (CUP), Different tax regimes, Market practices, Most appropriate method (MAM), Oil and gas, Platts quotes, Wet gas, Yield approach, Yield model
Equinor Energy sold wet gas to its parent Equinor ASA under an internal agreement, switching from the OTS price model to a dividend model in 2012, reducing taxable income subject to Norway's 78% petroleum tax rate. The tax authority reassessed using the CUP method based on the original OTS model. The Norwegian Court of Appeal dismissed Equinor Energy's appeal in 2022, upholding the tax authority's pricing adjustment for fiscal years 2012 to 2014 ... Read more