Tag: Rent

Payment charged between related parties for the use of property or premises. Tax authorities challenge below-market rental rates that shift profits to low-tax affiliates, or arrangements where one entity bears costs for premises used by another, signalling hidden profit transfers or economic control.

Russia vs LLC "Scientific and Production Association", October 2018, Supreme Court, Case No. А05-7708/2017

Russia vs LLC “Scientific and Production Association”, October 2018, Supreme Court, Case No. А05-7708/2017

/ Comparability Analysis, Transfer Pricing Methods, Comparability, Comparable Uncontrolled Price method (CUP), Invalid on formal grounds, Rent, Unjustified tax benefit
A Russian company leased premises to a related party at rates 10–20 times below those charged to independent tenants. The tax authority applied the cost plus method and issued an assessment citing unjustified tax benefit. The Supreme Court agreed the lease was non-arm's length but invalidated the assessment because the CUP method holds statutory priority and was not properly considered before applying cost plus ... Read more
France vs Société Lifestand vivre debout, 15 April 2016, CE

France vs Société Lifestand vivre debout, 15 April 2016, CE

/ Arm's Length Principle, Actual control, Control, Management, Rent, Swiss
A French company paid rent for Swiss premises and performed operational functions on behalf of a Swiss entity, with the French manager also managing the Swiss company. The French tax authority argued economic control existed between the two entities. The Council of State upheld the authority's position in 2016, confirming that the transactions were subject to French transfer pricing rules ... Read more