Tag: SAP

France vs SAP France, December 2021, CAA de VERSAILLES, Case No. 20VE01009

France vs SAP France, December 2021, CAA de VERSAILLES, Case No. 20VE01009

SAP AG (now SAP SE) is a German multinational software corporation that develops enterprise software to manage business operations and customer relations. The company is especially known for its ERP software. SA SAP France, a 98% subsidiary of SA SAP France Holding, itself wholly owned by the German group, had deposited funds under a Cash Management Agreement as sight deposits carrying an interest of 0%. Following an audit for the financial years 2012 and 2013, two assessment proposals were issued in December 2015 and November 2016, relating in particular to the 0% interest rate charged on the cash deposits. The tax authorities had added interest to SA SAP France’s taxable income calculated by reference to the rate of remuneration on sight deposits. SA SAP France contested the adjustments and furthermore requested the benefit of the reduced rate of corporation tax on income from industrial property, pursuant to Article 39 of the French General Tax Code, with regard to the royalties ... Read more
France vs SAP Laps SAS, February 2019, Administrative Tribunal of Montreuil, Case No. 1801945

France vs SAP Laps SAS, February 2019, Administrative Tribunal of Montreuil, Case No. 1801945

SAP Labs France SAS provided IT-related services to its German parent company, SAP AG, and received a cost-plus 6 % remuneration. According to the R&D agreement all income taxes, including withholding tax, applied on the amount paid by the parent company pursuant to the agreement would be paid for by the French company. However, the French tax administration held that the French company should have included the CVAE tax in the cost base on which it was remunerated, and by not doing so SAP Laps France had indirectly transferred profit to SAP AG. A tax reassessments under the French arm’s length provisions was then issued. SAP disagreed with the assessment and brought the case before the Administrative Tribunal. The Administrative Tribunal issued a decision in favor of the tax administration. “6. The contribution on the added value of companies is a burden on the company. Consequently, this tax could not be disregarded when determining the transfer price of the services ... Read more