TRANSFER PRICING CASES REVIEWED
This week, Prof Dr Daniel N Erasmus reviews the following cases:
CASE #1
Italy vs UFI Filters: Supreme Court Upholds Arm’s Length Pricing
In a significant ruling, the Italian Supreme Court dismissed the appeal of the tax authorities in the case against UFI Filters SpA, upholding the decision of the Regional Tax Commission. The case centered on the transfer pricing methodology used by UFI Filters SpA for transactions with its Chinese subsidiaries in 2009. The Supreme Court’s decision emphasizes the importance of accurate comparable selection and proper application of the arm’s length principle in transfer pricing disputes.
CASE #2
X Holding Case: Dutch Supreme Court Rules on TP Dispute
The Dutch Supreme Court ruled on a transfer pricing dispute between X Holding and the Dutch Tax Authorities, focusing on the arm’s length nature of intercompany transactions and the appropriate transfer pricing method. The court’s decision emphasized the importance of proper documentation and the application of the arm’s length principle in determining transfer prices.
CASE #3
Mylan Australia Holding Pty Ltd v Commissioner of Taxation
The Federal Court of Australia ruled in favour of Mylan Australia Holding Pty Ltd (MAHPL) against the Commissioner of Taxation. The case revolved around the disallowance of interest deductions claimed by MAHPL under intercompany promissory notes (PN A2 and PN A4) used to finance the acquisition of Alphapharm, an Australian subsidiary of Merck Generics. The court found that MAHPL did not obtain a tax benefit within the meaning of Part IVA of the Income Tax Assessment Act 1936 (Cth) and that the assessments issued by the Commissioner were excessive.