Tag: Treasury

Switzerland vs. A GmbH, 12 Sep. 2018, Administrative Court, Case No. SB.2017.00100

Switzerland vs. A GmbH, 12 Sep. 2018, Administrative Court, Case No. SB.2017.00100

A GmbH, based in Zurich, was a subsidiary of the D group operating mainly in the field of consumer electronics worldwide, headquartered in country E. A GmbH was primarily responsible for acquiring exploitation rights to … and other related activities. The D Group also owned company F in Land H, which was responsible for the global treasury and cash pooling of the Group. On December 1 2008 A GmbH had entered into an agreement with Company F for the short-term deposit of excess capital and short-term borrowing. Under the terms of the agreement, if the balance was in A GmbH’s favor, A GmbH would be credited interest based on the one-month London Interbank Bid Rate (LIBID) minus 6.25 basis points, but not less than 0.05%. Following an audit in relation to the tax periods of 1.4.2009-31.3.2010 and 1.4.2010-31.3.2011, the tax authorities took the view that the cash pool credit contains a proportion of long-term loans to company F and insofar ... Continue to full case
Switzerland vs. A GmbH, 7 Dec. 2016, Administrative Court, Case No. SB.2016.00008

Switzerland vs. A GmbH, 7 Dec. 2016, Administrative Court, Case No. SB.2016.00008

The distinction between cash pool receivables and long-term loans. A GmbH is a group company of the global A-group. The A Group also includes company F Ltd, which is responsible for the global treasury and cash pooling of the A Group. In 2008, A GmbH entered into an agreement with F Ltd on the short-term deposit of excess liquidity and short-term borrowing (cash pool). Under the terms of the agreement, if the balance were in A GmbH’s favor, recievables would be credited interest based on the one-month London Interbank Bid Rate (LIBID) less 6 , 25 basis points, but at least 0.05%. The Swiss tax administration argued that a portion of the cash pool receivable had to be treated as a long-term loan bearing higher interest rates. The long-term loan was set to the minimum cash pool receivable balance of each fiscal year. The interest rate on the long-term loan was set to the Swiss „Safe Habor Rates“ according to ... Continue to full case
France vs. Sociétè Nestlé Finance , Feb 2013, CAA no 11PA02914 and 12PA00469

France vs. Sociétè Nestlé Finance , Feb 2013, CAA no 11PA02914 and 12PA00469

In the Nestlé Finance case, a cash pool/treasury activity was transferred to a related Swiss entity. The function had been purely administrative, carried out exclusively for the benefit of parties related to the French company. The French company did not receive any compensation for the transfer of the cash pooling activity. First the Administrative Court concluded that the transfer of an internal administrative function to a foreign entity – even if the function only involved other affiliated companies ‘captive clientele’ – required the payment of arm’s-length compensation. This decision was then appealed and later revoked by a decision of the Administrative Court of Appeals. Click here for translation France vs Nestlè Finance 5 feb 2013 CAA no 11PA02914 . . . Click here for translation France vs Nestlè Finance 5 Feb 2013 CAA no 12PA00469 ... Continue to full case