Insights

EU: Recent International Transfer Pricing Cases

Sven-Eric Bärsch 07 Jun 2024

An analysis by Flick Gocke Schaumburg, Taxand Germany

Transfer pricing is becoming a major focus for tax authorities and courts, particularly during audits. Dr. Sven-Eric Bärsch, Anna Nussbaum and Hendrik Schmidt from Flick Gocke Schaumburg, Taxand Germany have highlighted some recent examples of international case law on the issue, illustrating key disputes and rulings. These include:

• France: Alchimedics SASU Case: Lyon Court of Appeal ruled in favour of the taxpayer, stating no obligation existed to charge service fees for patent administration due to prior ownership, rejecting tax authorities’ claim of undue advantage to foreign affiliates.
• France: Itron France SAS Case: Paris Court of Appeal sided with the taxpayer, criticizing tax authorities’ comparison of profit margins and lack of evidence for adjustments based on target profit margins.
• Italy: Terex Italia Case: Italian Supreme Court upheld the Transactional Net Margin Method (TNMM) for pricing between Terexlift srl and its British affiliate, stating tax authorities failed to sufficiently prove against its use.

These cases highlight significant issues in transfer pricing, including service chargeability for patent administration, validation of profit margins, and appropriate transfer pricing methods.

You can read a more detailed analysis of these cases here.

Article tags

EU | International Tax | Tax | Transfer Pricing