Tag: Most appropriate method

Italy vs SIOT S.p.A. June 2020, Cassazione, Case no Sez. 5 Num. 11837

Italy vs SIOT S.p.A. June 2020, Cassazione, Case no Sez. 5 Num. 11837

This case concerns Società Italiana per l’Oleodotto Transalpino Spa (S.I.O.T.) – , which operates the transalpine oil pipeline that crosses Italy, Austria and Germany, with the Austrian subsidiary T.O.O. GmbH and with the German subsidiary D.T.O. GmbH, belonging to the same group of companies. The Italian tax authorities had issued four notices of assessment for FY 2003-2006, related to undeclared revenues, determined in application of the transfer pricing regulations, according to which revenues deriving from transactions with foreign companies must be determined according to the “normal value” of the goods sold or services provided, cf, the arm’s length principle. S.I.O.T. had allocated profit from the activity between the Italien, Austrian and German pipelines using the profit split method – where kilometers of pipeline was the splitting factor. However, the cost of maintenance borne of S.I.O.T. was almost three times higher than that of the other two companies managing the pipeline due to the geography. The tax authorities therefore adjusted the ... Continue to full case
Poland vs L S.A, June 2019, Supreme Administrative Court, Case No. II FSK 1808/17 - Wyrok NSA

Poland vs L S.A, June 2019, Supreme Administrative Court, Case No. II FSK 1808/17 – Wyrok NSA

A Polish subsidiary in a German Group had taken out a significant inter-company loan resulting in a significantly reduced income due to interest deductions. At issue was application of the Polish arm’s length provisions and the arm’s length nature of the interest rate on the loan. The tax authorities had issued an assessment where the interest rate on the loans had been adjusted and the taxable income increased. On that basis, a complaint was filed by the company to the Administrative Court. The administrative court rejected the complaint and ruled in favor of the tax authorities. An appeal was then brought before the Supreme Administrative Court. The Supreme Administrative Court rejected the appeal, although it did not share some of the conclusions and statements of the Court of first instance. The key issue in the case was to determine is whether the provisions of Art. 11 (Containing the Polish arm’s length provisions), allowing the authority to determine the income of ... Continue to full case
Poland vs A Sp. z o.o., June 2019, Administrative Court, Case No GD 530/19

Poland vs A Sp. z o.o., June 2019, Administrative Court, Case No GD 530/19

A Polish Subsidiary A SP. z o.o. had incurred a loss in 2012 in the amount of PLN 1,357,333.66 and following an audit the tax authorities issued an assessment whereby the loss was reduced by an amount of PLN 234,019.90. The disputable issue was whether, in the circumstances of the case under consideration, the tax authorities correctly determined the amount of the applicant’s loss for 2012 in an amount other than that resulting from the correction of the declaration due to the finding that the Company undervalued income from transactions concluded with related entities for a total amount of PLN 234,019.90. The Administrative Court dismissed the complaint of A SP z o.o. According the the provided transfer pricing documentation the company had applied a TNMM and determined remuneration based on cost added a fixed percentage of 4% for the parent company, 8% for other companies. Meanwhile, the mark-ups actually applied by the applicant company in transactions concluded with related entities: ... Continue to full case