Tag: Relocation of functions

Spain vs Electrolux España, S.A., March 2023, Audiencia Nacional, Case No SAN 2414/2023 - ECLI:EN:AN:2023:2414

Spain vs Electrolux España, S.A., March 2023, Audiencia Nacional, Case No SAN 2414/2023 – ECLI:EN:AN:2023:2414

Following an audit, the Spanish tax authorities issued a notice of assessment where the profit of Electrolux España had been adjusted resulting in additional taxable income. The related party transactions resulting in the adjustment were Manufacturing costs under a manufacturing contract Profit margin under a distribution contract Deductibility for restructuring costs Pricing of a warehouse rental agreement. A complaint was filed by Electrolux España with the TEAC which upheld the part of the assessment referring to related-party transactions. An appeal was then filed by the company with the National Court. Judgment of the Court The Court ruled parcially in favor of the tax authorities and parcially in favour of Electrolux España. Excerpts “The Inspectorate therefore concludes that “where a group, as in this case, qualifies its contract manufacturer as a low-risk manufacturer and, in turn, this low-risk manufacturer sizes its plant with appropriate investments to serve only its related principal, it cannot be assumed that the losses arising from the ... Read more
German Guidance on Business Restructuring and Valuation issued in October 2010

German Guidance on Business Restructuring and Valuation issued in October 2010

In 2008 German legislation on business restructurings was updated to align with the new chapter XI in the OECD Transfer Pricing Guidelines. § 1 para. 3 AStG and the “Regulation on the application of the arm’s length principle according to §1 para. 1 AStG in cases of cross-border relocation of functions” of 12.8.2008 (Function Relocation Regulation, in short: FVerlV). Guidance was subsequently issued by the tax authorities in BMF letter of 13 October 2010, IV B 5 – S 1341/08/10003, BStBl 2010 I p. 774; in short: VWGFVerl. Click here for unofficial English translation Click here for other translation Germany 2010-10-13-Verwaltungsgrundsaetze-Funktionsverlagerung - BR ... Read more
German Guidance on Business Restructuring and Valuation issued in October 2010

German Guidance on Business Restructuring and Valuation issued in October 2010

In 2008 German legislation on business restructurings was updated to align with the new chapter XI in the OECD Transfer Pricing Guidelines. § 1 para. 3 AStG and the “Regulation on the application of the arm’s length principle according to §1 para. 1 AStG in cases of cross-border relocation of functions” of 12.8.2008 (Function Relocation Regulation, in short: FVerlV). Guidance was subsequently issued by the tax authorities in BMF letter of 13 October 2010, IV B 5 – S 1341/08/10003, BStBl 2010 I p. 774; in short: VWGFVerl. Click here for unofficial English translation Germany-2010-10-13-Verwaltungsgrundsaetze-Funktionsverlagerung-BR ... Read more