Tag: Research and development (R&D)

Any systematic or intensive study carried out in the manufacturing and industrial field, the results of which are to be used for the production or improvement of products and processes.

Norway vs A/S Norske Shell, September 2019, Borgarting lagmannsrett, Case No LB-2018-79168 – UTV-2019-807

Norway vs A/S Norske Shell, September 2019, Borgarting lagmannsrett, Case No LB-2018-79168 – UTV-2019-807

A/S Norske Shell with operations on the Norwegian continental shelf, which formed part of the Shell group, conducted research and development (R&D) through a subsidiary. All R&D costs were deducted. The tax authority applied the arms length principle and issued a tax assessment. It was assumed that the R&D expense was due to a joint interest with the other upstream companies in the Shell group. The Court of Appeal found that the R&D conducted in Norway also constituted an advantage for the foreign part of the group for which an independent company would demand compensation. Therefore, there was a revenue reduction that provided the basis for determining the company’s income by discretion in accordance with section 13-1 of the Tax Act. The determination of the size of the income reduction in the tax assessment had not based on an incorrect or incomplete fact, nor did the result appear arbitrary or unreasonable. The Court of Appeal concluded that the decision was ... Continue to full case
US vs Xilinx Inc, May 27, 2009, Court of Appeal

US vs Xilinx Inc, May 27, 2009, Court of Appeal

In a decision the IRS determined that Xilinx should have allocated stock option costs for foreign subsidiary research and development employees as part of its Section 482-7 cost-sharing agreement calculation. The United States Tax Court overruled the IRS, finding that in an arm’s-length situation, unrelated parties would not allocate employee stock option costs in the way determined by the IRS. The Court of Appeals later in 2009 overruled the opinion of the tax court, and found in favor of the IRS. US-vs-XILINX-INC-CIR06-74246 ... Continue to full case