Impact of legal ownership of expensive inventory on PLI – Part II

Allocation of burden of proof under Dutch law In the Netherlands, under Article 8b of the Corporate Income Tax Act (Wet op de vennootschapsbelasting 1969: CITA) the Dutch Tax Authorities (DTA) bears the initial burden of making it plausible (aannemelijk maken), on the basis of facts and circumstances, that the transfer price agreed between related […]

Impact of legal ownership of expensive inventory on PLI – Part I

Czech Republic vs Inventec s.r.o. Inventec CZE s.r.o. (“Inventec CZ”) is a wholly owned Czech subsidiary of Inventec Corp., Taiwan (“Inventec TW”). In 2013, Inventec CZ purchased materials worth EUR 680 million from Inventec TW. Inventec CZ used the materials to manufacture server cabinets for Hewlett Packard (“HP”), an unrelated party. The terms and conditions […]

Runway to ‘fixed place PE’: German case on Art. 5(1)

Facts of the case Mr. X, a U.K. national with residential properties in Germany and the U.K. (which can be considered his ‘center of vital interests’; relevant for Art. 4 ‘Resident’), was an aircraft mechanic/engineer who held licenses to maintain various types of aircraft during the years in question (i.e., 2008 to 2014). Mr. X […]

Colombian TP-case highlights PLI-selection and proper substantiation of comparability adjustments

INDEGA has an advertising participation agreement with a related company, Coca-Cola Servicios de Colombia S.A. (“CCS SA”). The parties jointly fund marketing and advertising expenses related to brand positioning in the Colombian market. INDEGA receives reimbursements from CCS SA for several advertising concepts, including purchasing refrigeration equipment and packaging, general marketing expenses, participation in sales […]

Strategic Insights into Transfer Pricing: Unveiling Common Audit Red Flags (Part II)

This blog is the second of our two-part series calling attention to common red flags that stand out for tax authorities during audits. In these blogs we share our experience with tax audits, specifically pointing out some pitfalls to watch out for while framing Transfer Pricing (“TP”) policies and compiling TP documentation.
Our insights are meant to serve as a starting point for companies to assess and refine their approach to TP in order to be better prepared for audits and scrutiny. If you find the insights in this blog helpful, do also read our other blog on this topic, in which we listed our first four tips for effectively managing and mitigating these “red flags”.

Strategic Insights into Transfer Pricing: Unveiling Common Audit Red Flags (Part I)

1. Big swings in profits Large fluctuations in a company’s profits one year to the next naturally draw the attention of the tax authorities. In every such case, there is bound to be a discussion. Hence, it is critical to understand the reasons behind profit fluctuations to assess the appropriateness of the TP model and […]

Latest update on the India-Netherlands dividend WHT rate: Ruling from the Supreme Court of India

This Indian SC ruling has caused quite a stir among companies invested in India as it could lead to a flurry of tax and penalty demands from the Indian tax authorities. Notably, with regard to the Netherlands, the impact of the SC ruling appears to be limited to the dividend WHT rate under the India-Netherlands […]

The most impactful changes to the NL – MEX DTAA (following the ratification and deposit of the MLI by Mexico)

Since the Netherlands has already ratified and deposited the MLI with the OECD in 2019, the Netherlands-Mexico DTAA (or “the DTAA”) will be modified since the MLI entered into force for Mexico’s DTAAs (i.e., 1 July 2023). The DTAA is modified based on each party’s specific choice to opt in or opt out of the […]

10 Quick Observations on the EC’s ATAD3 Proposal

For a detailed explanation of the implementation, consequences and who’s in/out of ATAD3, reference is made to our blog ATAD3 – Who’s In & Who’s Out. 1. Need for holistic approach ATAD3 is part of a larger effort to combat the use of shell companies for tax avoidance. For example, the ECJ’s decision in the Danish […]

ATAD3 – Who’s In & Who’s Out

In this blog, we provide insight into which companies will be most affected by the implementation of the European Commission’s (proposed) Directive – ATAD3 (or the Third Anti Tax Avoidance Directive). The amended draft of the ATAD3 proposal has been approved by the European Parliament and published by the European Commission (“EC”) on 17 January 2023. The Member States aim to implement the proposed Directive w.e.f. 1 January 2024. However, some of the provisions of the ATAD3 proposal have a two-year look-back period (i.e., covering 2022 & 2023).