The case of Volkswagen Argentina S.A. concerns whether the company’s income for FY 1999 – 2001 had been determined in accordance with the arm’s length principle. For the purposes of its transfer pricing analysis, Volkswagen Argentina (VWA) had included in its profits an extraordinary gain resulting from the waiver of a loan granted by Volkswagen Argentina Holding S.A., and on this basis had concluded that the results were at – or even above – arm’s length. The tax authorities disagreed with the adjustment made to VWA’s profits and found that the company had not been remunerated at arm’s length and an assessment of additional taxable income was issued. An complaint was made to the Tax Court, which ruled in VWA’s favour. The tax authorities then filed an appeal with the Court of Appeal, which was dismissed in December 2019. The case went on to the Supreme Court. Judgment The Supreme Court ruled in favour of the tax authorities. Click here ...
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