Following a 2013 intra-group trademark transfer and leaseback, Polish tax authorities disallowed royalty deductions and trademark amortisation, arguing the holding entity performed no DEMPE functions. The Supreme Administrative Court sided with the taxpayer in 2025, ruling that pre-2019 transfer pricing rules only permitted price adjustments and provided no legal basis to disregard or reclassify actual transactions ... Read more

Polish tax authorities disallowed royalty payments made by A-TM Licensor Sp. z o. o. to related parties for use of the 'A' trademark, recharacterising the licensing agreements as service contracts and asserting the taxpayer retained economic ownership. The Supreme Administrative Court, ruling in 2025, annulled both the first-instance court judgment and the tax authority's decisions in their entirety, finding in favour of the taxpayer ... Read more

A Polish operating company paid licence fees to a related entity for use of a group trademark. The tax authority argued the licensor held only formal legal ownership while the taxpayer retained economic ownership, recharacterising the royalties as low-value services using TNMM. Poland's Supreme Administrative Court ruled in favour of the taxpayer in June 2025, rejecting the authority's recharacterisation and functional analysis approach ... Read more

A Polish company transferred its trademarks to a related party and paid licence fees, which the tax authority challenged as overstated costs, issuing a PLN 14.5 million assessment. The Administrative Court dismissed the taxpayer's complaint, but the Supreme Administrative Court overturned both rulings in 2025, finding the tax liability had expired because the authority's use of criminal proceedings to suspend the limitation period was invalid ... Read more

A Polish fertilizer manufacturer transferred its trademarks to a subsidiary and paid royalties for their continued use. The tax authority recharacterised the licence agreement as a trademark management services contract and reduced deductions. Poland's Supreme Administrative Court ruled mostly in the taxpayer's favour in 2025, finding that pre-2019 rules did not permit transaction recharacterisation, and remanded the case for re-examination ... Read more

A Polish pharmaceutical wholesaler transferred real estate to a related entity and subsequently leased it back. The tax authority recharacterised the arrangement, adding a restructuring fee to taxable income on the basis that assets were transferred on non-arm's length terms. The company argued the related-party rules did not apply. Poland's Supreme Administrative Court ruled mostly in favour of the taxpayer in August 2024 ... Read more

A Polish company transferred trademark ownership to a subsidiary in 2010, paid licence fees, then repurchased the trademark in 2013, claiming depreciation deductions. The tax authority recharacterised the arrangement as a service contract, finding the subsidiary performed no DEMPE functions and that the repurchase price was inflated. The Provincial Administrative Court remanded the case for re-examination in June 2023 ... Read more

A Polish taxpayer structured an intra-group sale-and-leaseback of self-developed trademarks and industrial designs, with royalties paid back to the brand company. Tax authorities challenged the arrangement using DEMPE-style analysis and recharacterised the transactions, denying amortisation and royalty deductions. The Provincial Administrative Court sided with the taxpayer in April 2023, holding that the 2016 legal framework permitted only price adjustments, not full recharacterisation of legally executed transactions ... Read more

Skechers USA transferred IP to a related Delaware entity, SKII, then licensed it back and claimed Wisconsin franchise tax deductions for royalties, management fees, and interest. The Wisconsin Department of Revenue disallowed the deductions, finding the arrangement lacked any valid non-tax business purpose and economic substance. The Wisconsin Tax Appeals Commission upheld the Department's assessments in 2023, ruling entirely in favour of the tax authority ... Read more

A Polish fertilizer manufacturer transferred trademark ownership to a subsidiary and paid royalties for continued use. Tax authorities recharacterised the licence as administrative services, reducing deductions. The Regional Administrative Court ruled that pre-2019 Polish tax law did not permit transaction reclassification, only arm's length price adjustments, and remanded the case for proper reexamination of whether royalties met the arm's length standard ... Read more

A Polish company sold trademarks to a subsidiary, then paid licence fees for their use back, deducting royalties in its 2013 tax return. The tax authority challenged the arrangement as artificial and tax-motivated. The Polish Administrative Court set aside the assessment in 2022, ruling that taxpayers were not obliged to maximise tax payments and that Poland's anti-avoidance clause, enacted in July 2016, could not be applied retroactively to 2013 transactions ... Read more

Where the business restructuring provides for a transfer of an intangible followed by a new arrangement whereby the transferor will continue to use the intangible transferred, the entirety of the commercial arrangement between the parties should be examined in order to accurately delineate the transaction. If an independent party were to transfer an asset that it intends to continue exploiting, it would be prudent for it to negotiate the conditions of such a future use (e.g. in a license agreement) concomitantly with the conditions of the transfer. In effect, there will generally be a relationship between the determination of an arm’s length compensation for the transfer, the determination of an arm’s length compensation for the post-restructuring transactions in relation to the transferred intangible, such as future licence fees that may be payable by the transferor to be able to continue using the asset, and the expected future profitability of the transferor from its future use of the asset. For instance, ... Read more

Also in the case where a local operation disposes of the legal ownership of its intangibles to a foreign associated enterprise and continues to use the intangibles further to the disposal, but does so in a different legal capacity (e.g. as a licensee), the conditions of the transfer should be assessed from both the transferor’s and the transferee’s perspectives. The determination of an arm’s length remuneration for the subsequent ownership, control and exploitation of the transferred intangible should take account of the extent of the functions performed, assets used and risks assumed by the parties in relation to the intangible transferred, and in particular analysing control of risks and control of functions performed relating to the development, enhancement, maintenance, protection, or exploitation of the intangibles ... Read more

A Polish pharmaceutical wholesaler transferred real estate to a related entity, which then leased it back under fee arrangements. The tax authority added a restructuring fee to taxable income, arguing the transfer was on non-arm's length terms. The company contested the authority's jurisdiction, arguing no related-party transaction had occurred. The Administrative Court ruled mostly in favour of the taxpayer in June 2021 ... Read more

A Polish brewery transferred its trademarks to a Cyprus subsidiary and paid royalties for their subsequent use. The tax authority disallowed the royalty deductions and assessed additional taxable income. Poland's Supreme Administrative Court reversed the decision in 2020, ruling that tax authorities cannot derive negative tax consequences from lawful transactions absent explicit statutory authorisation, and that minimising tax burden is a taxpayer's natural right ... Read more

A Polish brewery transferred its trademarks to a Cyprus subsidiary and subsequently paid royalties for their use. The tax authority disallowed the deductions, finding the payments lacked genuine business purpose and were designed solely to generate artificial tax costs. The Provincial Administrative Court dismissed the brewery's appeal in March 2019, upholding the assessment and confirming the payments had no causal link to generating revenue ... Read more

Based on these findings, it can be concluded that Company A continues to perform the same functions and assume the same risks as before the restructuring took place. In particular, Company A continues to have the capability and actually performs control functions in relation to the risk of exploitation of the intangibles. It also carries on the functions related to the development, maintenance and execution of the worldwide marketing strategy. Company Z has no capability to perform control functions, and does not in fact perform the control functions needed to assume the intangible related risks. Accordingly, the accurate delineation of the transaction after the restructuring may lead to the conclusion that this is in substance a funding arrangement between Company A and Company Z, rather than a restructuring for the centralisation of intangible management. An assessment may be necessary of the commercial rationality of the transaction based on the guidance in Section D.2 of Chapter I taking into account the ... Read more

Where the business restructuring provides for a transfer of an intangible followed by a new arrangement whereby the transferor will continue to use the intangible transferred, the entirety of the commercial arrangement between the parties should be examined in order to accurately delineate the transaction. If an independent party were to transfer an asset that it intends to continue exploiting, it would be prudent for it to negotiate the conditions of such a future use (e.g. in a license agreement) concomitantly with the conditions of the transfer. In effect, there will generally be a relationship between the determination of an arm’s length compensation for the transfer, the determination of an arm’s length compensation for the post-restructuring transactions in relation to the transferred intangible, such as future licence fees that may be payable by the transferor to be able to continue using the asset, and the expected future profitability of the transferor from its future use of the asset. For instance, ... Read more

Also in the case where a local operation disposes of the legal ownership of its intangibles to a foreign associated enterprise and continues to use the intangibles further to the disposal, but does so in a different legal capacity (e.g. as a licensee), the conditions of the transfer should be assessed from both the transferor’s and the transferee’s perspectives. The determination of an arm’s length remuneration for the subsequent ownership, control and exploitation of the transferred intangible should take account of the extent of the functions performed, assets used and risks assumed by the parties in relation to the intangible transferred, and in particular analysing control of risks and control of functions performed relating to the development, enhancement, maintenance, protection, or exploitation of the intangibles ... Read more

Exelon Corp entered into sale-and-leaseback transactions involving power plants, treating them as like-kind exchanges to defer gain recognition. The IRS recharacterised the arrangements as loans under the substance over form doctrine. The US Tax Court agreed, finding Exelon never acquired the benefits and burdens of ownership and that its return was predetermined, requiring it to recognise the gain on the 1999 plant sales under section 1001 ... Read more

A Polish company transferred trademarks to a group entity and licensed them back, arguing that special financial leasing provisions excluded the arm's length rules under Article 11. The tax authority disagreed. The Polish Administrative Court upheld the authority's position in 2012, ruling that the arm's length provision constitutes lex specialis and applies to leasing arrangements between related parties ... Read more

Talbots transferred intellectual property to its wholly owned subsidiary Chicago Classics and paid royalties back for its use, claiming tax deductions. The Massachusetts Commissioner of Revenue disallowed the deductions, finding the arrangement a sham transaction lacking economic substance and business purpose. The Appellate Tax Board and court affirmed in 2011, upholding reattribution of the subsidiary's income to Talbots ... Read more

A Dutch shoe company sold its trademark to a related entity, then moved that entity to the Netherlands Antilles and paid royalties for use of the mark. The Dutch tax authority challenged the deductions, arguing the arrangement lacked business substance and arm's length pricing. The District Court agreed, disregarding the transaction entirely due to the absence of genuine business reasons and the licensee having no employees to manage the trademark ... Read more

Sherwin-Williams transferred trademarks to Delaware subsidiaries and licensed them back, deducting royalty and interest payments on its state tax return. Massachusetts' Department of Revenue disallowed the deductions, arguing the transactions lacked economic substance and arm's length terms. The Appellate Tax Board upheld the assessment, but the Massachusetts Supreme Judicial Court reversed, finding the transactions had genuine economic substance and were not shams ... Read more

A UK farming company entered into circular transactions constructed purely for tax purposes. The House of Lords rejected the arrangements, establishing the Ramsay principle: courts should look at the substance of a transaction series rather than its legal form. The decision confirmed purposive statutory construction and has since been widely applied in UK tax avoidance cases where transactions lack genuine economic substance ... Read more