A French metal trading company was assessed for transfer pricing adjustments after the tax authority found it sold goods to a Luxembourg affiliate at below-market prices and paid non-deductible commissions to a Costa Rica entity in a privileged tax regime. The Administrative Court of Strasbourg and the Court of Appeal both rejected the company's appeals, upholding the authority's use of the resale price method and disallowance of unsubstantiated commission expenses ... Read more

Atlas Copco Tanzania had failed to account for VAT on commission income earned from indent sales as agent for sister companies. After external auditors flagged the omission, the company filed late VAT returns but applied a retroactive accounting reversal to reduce the taxable commission amount. The Tanzania Revenue Authority rejected the adjustment and issued additional assessments. The Court of Appeal upheld the tax authority's position in 2020, finding the reversal was not valid ... Read more

A Romanian company challenged tax authority adjustments after an audit found deficiencies in its comparability study, covering royalties, support services, and strategic management fees. The tax authority replaced the study and disallowed carried-forward losses. Romania's Supreme Administrative Court ruled in favour of the tax authority in 2019, upholding the revised benchmark analysis and confirming the transfer pricing adjustments despite double taxation arguments raised by the taxpayer ... Read more

An Italian subsidiary received a 29% sales commission under a 1999 written agreement with an Irish related party, later reduced to 20% via email. The tax authority assessed income based on the original written rate. Italy's Supreme Court upheld the regional tax court's decision in 2018, affirming that the written contract prevailed and setting the commission at 22.38% based on a transfer pricing study ... Read more

A transfer pricing dispute between South African Revenue Service and Sishen Iron Ore, a subsidiary of Kumba Iron Ore, has now been resolved in a settlement of ZAR 2.5bn. The case concerned disallowance of sales commissions paid to offshore sales and marketing subsidiaries in Amsterdam, Luxembourg and Hong Kong. Since 2012, Kumba Iron Ore’s international marketing has been integrated with the larger Anglo American group’s Singapore-based marketing hub. The settlement follows a similar investigations into the transfer pricing activities of Evraz Highveld Steel, which resulted in a R685 million tax claim against the now-bankrupt company related to apparent tax evasion using an Austrian shell company between 2007 and 2009 ... Read more

A Croatian company paid a related German party for consultant services and received payments from its US parent for software sales services. The tax authority found insufficient documentation and non-arm's length pricing, issuing additional CIT and VAT assessments. Both the Administrative Court and the High Administrative Court upheld the authority's position, confirming the taxpayer had failed to justify the pricing of its intra-group transactions ... Read more

Reynolds Tobacco France received a 2–3% commission from its parent for covering French administrative and representation costs. The French tax authority argued comparable companies received 8%, but the Administrative Court of Appeal found the services were sufficiently different to justify the lower rate, ruling in favour of the taxpayer and rejecting the alleged profit transfer ... Read more

A US bank holding company's subsidiaries arranged credit life insurance for borrowers, but national banking laws prohibited the banks from receiving sales commissions. The IRS sought to allocate 40% of reinsurance premium income to the banks under Section 482. The Tax Court upheld the assessment, but the Court of Appeals reversed it. The US Supreme Court affirmed in 1972, ruling the allocation was impermissible where payment was legally prohibited ... Read more