Tag: Tested party

Denmark vs. Danish Production A/S, Feb 2018, Tax Tribunal, SKM2018.62.LSR

Denmark vs. Danish Production A/S, Feb 2018, Tax Tribunal, SKM2018.62.LSR

The Danish Tax Tribunal found that the tax administration had been entitled to make an estimated assessment, due to the lack of a comparability analysis in the company’s transfer pricing documentation. The Tax Tribunal also found that the Danish company had correctly been chosen as tested party when applying the TNMM, although the foreign sales companies were the least complex. Information about the foreign sales companies was insufficient and a significant part of the income in the foreign sales companies related to sale of goods not purchased from the Danish production company. Click here for translation SKM2018-62-LSR ... Continue to full case
UK vs. DSG Retail (Dixon case), Tax Tribunal, Case No. UKFT 31

UK vs. DSG Retail (Dixon case), Tax Tribunal, Case No. UKFT 31

This case concerns the sale of extended warranties to third-party customers of Dixons, a large retail chain in the UK selling white goods and home electrical products. The DSG group captive (re)insurer in the Isle of Man (DISL) insured these extended warranties for DSG’s UK customers. Until 1997 this was structured via a third-party insurer (Cornhill) that reinsured 95% on to DISL. From 1997 onwards the warranties were offered as service contracts that were 100% insured by DISL. The dispute concerned the level of sales commissions and profit commissions received by DSG. The Tax Tribunal rejected the taxpayer’s contentions that the transfer pricing legislation did not apply to the particular series of transactions (under ICTA 88 Section 770 and Schedule 28AA) – essentially the phrases ‘facility’ (Section 770) and ‘provision’ (Schedule 28AA) were interpreted broadly so that there was something to price between DSG and DISL, despite the insertion of a third party and the absence of a recognised transaction ... Continue to full case