Tag: Terms and conditions

Germany vs Cash Pool GmbH, January 2018, BFH Case No. I R 74-15

Germany vs Cash Pool GmbH, January 2018, BFH Case No. I R 74-15

The German court concludes that a Cash Pool agreement must be clear and unambiguous both in substance and amount. And if only a minimum and maximum interest rate has been agreed the arm’s length standard is not met. Click here for translation BUNDESFINANZHOF Urteil vom 17-1-2018 I R 74-15 ... Continue to full case
Germany vs C-GmbH, December 2014, Bundesfinanzhof, Case No I R 23/13

Germany vs C-GmbH, December 2014, Bundesfinanzhof, Case No I R 23/13

C-GmbH was the sole shareholder of the I-GmbH. In 2000, I-GmbH, together with another company, set up a US company for the development of the US market, H-Inc., In which the I-GmbH held 60 per cent of the shares. H-Inc. had recived equity from the two shareholders and also received a bank loan of approx. $ 1.5 million (USD), which the shareholders secured through guarantees. As of December 31, 2003, the balance sheet of H-Inc. showed a deficit not covered by equity of approx. 950,000 USD. On June 30 , 2004,  I-GmbH became the sole shareholder of H-Inc. Then the bank put the H-Inc. granted loans due. Since H-Inc. was not able to serve the bank loan, C-GmbH paid the bank. As of December 31, 2004, the balance sheet of H-Inc. showed a deficit not covered by equity of approx. $ 450,000 , which at December 31 , 2005 amounted to approx. $ 1.6 million, as at 31 December 2006 $ ... Continue to full case
Korea vs Defence Corp, March 2006, Supreme Court, Case No 2004두4239

Korea vs Defence Corp, March 2006, Supreme Court, Case No 2004두4239

In this case the Korean Supreme Court concluded that the tax authorities had used transactions with different terms and conditions to price the controlled transactions. According to Article 5 (1) of the National Development and Reform Act in Korea, the TNM method can be applied only when the normal price can not be calculated by a conventional transfer pricing method, e.g. due to lack of comparable transactions. In addition, there was no proper way to adjust for the significant differences between the controlled transaction and transaction. Taxation based on the conventional transfer pricing methods may later be performed by the tax referee or the court. In fact, some cases have admitted the unlawfulness of tax disposition on the grounds of unreasonable selection of comparable transactions or lack of rational adjustment. However, if the tax assesssment is canceled in court, there will be cases where the taxation can no longer be carried out due to statues of limitations. Click here for ... Continue to full case