A public medical university “W” had submitted a request for a written interpretation (binding ruling) to the tax authorities asking whether it was considered a related entity under the Polish arm’s length provisions to a public health care institution it had established. The tax authorities replied in the affirmative. Not satisfied with the ruling, an appeal was filed with the Regional Court, which rejected the binding ruling and concluded that the parties were not related. The tax authorities then appealed to the Supreme Administrative Court. Judgement of the Supreme Administrative Court. The Supreme Administrative Court ruled in favor of the tax authorities and overturned the decision of the Regional Court. Excerpt “It is not possible to agree with the assertion of the Court of First Instance that it is possible to assume a priori that the funds received under the agreement by the SPZOZ do not constitute a typical remuneration, established under market conditions, for making the infrastructure available for teaching activities, but a specific financing of the activities (covering of costs) that the university performs with the use of the therapeutic entity created by it. Also, the establishment in the u.d.l. “strictly”, according to the WSA in Warsaw, defined rules related to the adaptation and provision of infrastructure by a teaching hospital for the purposes of teaching activities of a medical university, in conjunction with the financing of these activities by universities, cannot result in the recognition of the accuracy of the thesis that this makes them incomparable to market transactions. As indicated above with regard to the contracting of services, apart from the obligation related to the adaptation and provision by the teaching hospital of the infrastructure for the teaching activities of the medical university, there are no rigid, specific rules, and potentially comparable market may be transactions between medical universities other than W. and the therapeutic entities created by them. 4.5 Given the specific nature of medical market services, it would be desirable to exempt transactions between medical universities and the medical entities they create from the transfer pricing rules. This has been the case since 24 June 2020 as a result of the amendment of Article 11b of the u.p.d.o.p. Pursuant to the newly amended provision in this article, i.e. point 3, the provisions of the chapter on transfer pricing shall not apply to transactions between a medical university within the meaning of Article 2(1)(13) of the Act of 15 April 2011 on medical activity and a medical entity referred to in Article 6(6) of that Act (i.e. between a forming entity and a medical entity). As aptly pointed out in the grounds of the cassation appeal, since the newly introduced provision excludes transactions between the entities indicated therein from the obligation to apply the transfer pricing provisions, it should be assumed that, until the date of its introduction, in accordance with the will of the legislator, universities as forming entities and established medical entities were subject to such obligation as related entities within the meaning of Art. 11(4) of the u.p.d.o.p. in the wording in force until 31 December 2018 and Article 11a(1)(4) of the u.p.d.o.p. in the wording in force from 1 January 2019. 4.6 In view of the above, the Supreme Administrative Court, pursuant to Article 188 in conjunction with Article 151 of the A.P.S.A., repealed the appealed judgment and dismissed the complaint, as the merits of the case had been sufficiently clarified.” Click here for English translation Click here for other translation ...

According to Refinitiv Limited a Diverted Profit Tax-notices they had been served for FY 2018 by the tax authorities were unlawful because the tax authorities had used another transfer pricing method (Profit Split) than the method previously agreed (TNMM with a cost based PLI) in respect of the same services in an earlier Advance Pricing Agreement (“APA”) covering FY 2008-2014. Judgement of the Upper Tribunal The Court did not find an inconsistency between the Diverted Profit Tax-notices issued by the tax authorities in respect of 2018 and the APA covering FY 2008-2014. The appeal of Refinitiv Limited was dismissed. Excerpt “90. HMRC’s acceptance that the 2018 profits were referable to the provision of services in 2008-2014 does not therefore assist the claimants’ case. The APA had terminated and had no effect in relation to the pricing of services for the purposes of calculating profits in 2018. The referability did not mean the services had to be priced under an APA that did not have  effect.91. In conclusion there is accordingly no inconsistency between the DPT notices that HMRC issued in respect of 2018 and the APA. The DPT notices concerned an accounting period in relation to which the APA had no effect.” ...

In 2013 “A” SARL requested a tax ruling confirming that its US branch had sufficient substance to qualify as a permanent establishment. The tax authorities issued the ruling conferming this to be the case, but only premised on the information provided by “A” SARL. The ruling would not be valid if the facts or circumstances described therein were incomplete or inaccurate. In 2016, “A” SARL filed an amended tax return for 2013 in which it had effectively allocated a dividend in kind to the US branch. Despite of the above mentioned tax ruling, the tax authorities disallowed the amendments to the tax return, finding that the US branch did not have sufficient substance to qualify as a permanent establishment. Not satisfied with the decision “A” SARL filed an appeal with the Administrative Court. Judgement of the Administrative Tribunal The Court decided in favour of the tax authorities and denied the recognition of US permanent establishment. Excerpt (in English) “In view of all the inconsistencies noted above in relation to (i) the date on which the Branch was set up, (ii) the transfer to the Branch of the claimant company’s shareholdings in company “M” and (iii) the distribution of the dividend to the claimant company, and in the absence of detailed and concrete explanations from the plaintiff company concerning, in particular, the contradictions in the dates mentioned in the various resolutions of its Board of Directors, respectively in its initial and amending tax returns, the allegation that the disputed dividend in kind was attributed to it via the branch must be rejected as being unsupported by any tangible evidence. Indeed, it would have been incumbent on the plaintiff company to provide documents that would have made it possible to establish irrevocably and indisputably that the disputed bonds had first been transferred by “M” to the branch before being subsequently reallocated to it by the branch, such as, for example, a copy of the decision by the shareholders of “F” to distribute a dividend in kind to the branch, with a precise indication of the date of payment, proof of the registration of the bonds in “M”‘s share account, proof of the transfer of the bonds to “F”‘s share account, proof of the transfer of the bonds to “M”‘s share account, proof of the transfer of the bonds to “F”‘s share account, proof of the transfer of the bonds to “M”‘s share account and proof of the transfer of the bonds to “F”‘s share account. bonds to the branch’s securities account, or a copy of the minutes and decisions taken by the manager of the US Branch, and in particular a document issued by the latter stating that the … Eurobonds were continued by the branch to the plaintiff company after July 11, 2013 at 4:30 p.m., i.e. the time when, according to the aforementioned letter of July 11, 2013, the branch would have been allocated the plaintiff company’s holdings in company “F”, or, if applicable, on July 12, 2013, which it nevertheless remains in default of doing. This conclusion is not shaken by the documents submitted by the plaintiff company to establish the existence of a permanent establishment in the United States within the meaning of Article 5 of the Convention, namely the certificate of registration of the Stable Establishment with the Connecticut revenue authorities, the branch’s bank account details and the copy of the service contract between the branch and the American company “H”. Indeed, it must be noted that the certificate of registration of the Stable Establishment with the Connecticut Revenue Service contains no precise date, so that it has not been established that the said establishment was actually created on July 11, 2013, as the plaintiff company maintains. As for the other two documents, they are irrelevant to the issue of the actual transfer of the dividend in kind to the branch, and must therefore be rejected as irrelevant in this respect. The same is true of the copy of the document described by the plaintiff company as a “copy of the confirmation of the listing of the Eurobonds on the Jersey Stock Exchange”, dated October 9, 2013, which, in the absence of more detailed explanations, does not allow us to conclude that the disputed bonds were actually reallocated to the plaintiff company via the branch on July 12, 2013. It follows that it has not been unequivocally established that the key elements of the transaction in the present case correspond to those described in the request for an advance ruling, so that the ACD was not obliged to comply with it, in particular as regards the recognition of the branch as a permanent establishment and consequently the taxation of its profits in the United States. It follows from all the foregoing considerations that the tax office rightly refused to take into consideration the new tax balance sheet as provided by the plaintiff company together with the rectifying tax return dated November 15, 2016, so that the bulletins for community income tax and communal business tax for the year 2013, issued on September 21, 2016 are to be confirmed. It follows from all the foregoing considerations that the appeal is not well-founded in any of its pleas, so that the plaintiff company is to be dismissed.” Click here for English translation Click here for other translation ...

“S.” sp. z o.o. had filed a requested a written interpretation (binding ruling) with the tax authorities. The company had asked the following question: when calculating the income ratio to which the tax rate referred to in Article 24d(1) of the A.P.C. may be applied, can the transfer pricing regulations be applied accordingly (mutatis mutandis) by applying the profit split method – residual analysis (the method listed in § 13(3)(2) of the Ordinance). The request was dismissed by the tax authorities, stating that it could not assess the position presented in the application, as this would go beyond the framework of the individual interpretation proceedings defined by the legislator. An appeal was filed by “S” sp. z o.o. with the regional court and the court ruled in favour of the company. An appeal was then filed by the tax authorities with the the Supreme Administrative Court. Judgement of the Supreme Administrative Court. The Court dismissed the appeal of the tax authorities and upheld the decision of the regional court. According to the Supreme Administrative Court, “S.” sp. z o.o. had a right to obtain reliable information as to how – in the actual state of affairs/future event pertaining to it – the tax authority interprets the tax regulations applicable to it, which may affect the correctness of its settlement, and in the case of determining the tax base. Excerpt “According to the Supreme Administrative Court, both the actual state of affairs/future event described by the applicant in its application and the question contained in the application were in fact a question about the validity of the subsumption of the actual state of affairs/future event presented in the application under the relevant provisions of tax law. Moreover, the applicant’s request did not concern the interpretation of provisions other than those of tax law. The court of first instance correctly assessed that the analysis of the application and the applicant’s position indicates that its primary objective is to obtain an answer to the question whether, in the factual state/future event presented in the application, the income ratio to which the tax rate referred to in Article 24d(1) of the Corporate Income Tax Act of 15 February 1992 (Journal of Laws of 2020, item 1406, as amended); hereinafter: the “p.d.o.p.” may be – when calculating the income ratio to which the tax rate referred to in Article 24d(1) of the Corporate Income Tax Act of 15 February 1992 (Journal of Laws of 2020, item 1406, as amended); hereinafter: the “p.d.o.p.” – applied accordingly (mutatis mutandis) the transfer pricing regulations by applying the profit split method – split analysis, according to the method listed in § 13(3)(2) of the Regulation of the Minister of Finance of 21 December 2018 on transfer pricing for corporate income tax (Journal of Laws of 2018, item 259 as amended); hereinafter: ‘the Regulation’. Since the company, in presenting its own legal assessment of the above-mentioned factual state/future event, stated that the provisions of Article 24d(3)-(8) of the u.p.d.o.p.. do not explicitly specify the method by which income from intellectual property referred to in Article 30ca para. 2(3) of the u.p.d.o.p.. (should be: Article 24d(2)(8) of the u.p.d.o.p.. – note of the court), according to it, the most appropriate method is the residual profit split method, in which the separation of income streams (from development and design activities) would take place in two stages appropriate for this method. However, this company’s own legal assessment of the presented facts/future event should have been subject to the assessment of the interpreting authority, since both the provisions of the p.d.o.p, as well as the aforementioned implementing regulation issued pursuant to Article 11j(1)(1)(2) of the u.p.d.o.p.. constitute provisions of tax law, within the meaning of Article 3(2) of the A.p.l. This provision stipulates that whenever provisions of the tax law are referred to in the Act – it is understood as the provisions of tax acts, provisions of agreements on avoidance of double taxation ratified by the Republic of Poland and other international agreements on tax issues ratified by the Republic of Poland, as well as provisions of executive acts issued on the basis of tax acts. Undoubtedly, therefore, the company requested an individual interpretation of the provisions of tax law, i.e. the provision of Article 24d(2)(8) of the VAT Act and the provisions of the implementing act to the VAT Act, i.e. the aforementioned regulation. Moreover, what is important in the case, the applicant, when describing the facts/future event, directly classified its activity as research and development activity, and its aim was to confirm whether it is possible to adopt, mutatis mutandis, for the calculation of the income ratio to which the tax rate referred to in Article 24d(1) of the A.P.C. may be applied. – transfer pricing regulations by applying the profit split method – split analysis, according to the method listed in § 13(3)(2) of the aforementioned regulation.” Click here for English translation Click here for other translation ...

C is the parent company of the C-group which is involved in the construction business. C is part of a joint venture and for the expansion of these activities a framework agreement on shareholder loans was concluded. Under the agreement two shareholder loans were granted: ***loan*** II totalling 212,935,716.33 euros and ***loan*** III totalling 446,000,000 euros. At issue is whether (***loan*** II and ***loan*** III) are to be regarded as hidden equity capital or debt capital. In regards of loan II a binding ruling had previously been issued stating that the loan was hidden equity. C took the position that both loan II and loan III were to be treated for tax purposes as equity capital. Following an audit the tax authorities assessed both shareholder loans as debt capital and added interest income to the taxable income of C. In regards of the binding ruling previously issued, the authorities stated that the underlying facts had changed to such an extend that the ruling was no longer binding. The court of first instance held in favour of C, and an appeal was then filed by the tax authorities. Judgement of the Court The court upheld the decision of the court of first instance and found that the shareholder loans should be treated as hidden equity capital. Excerpts Loan II “Pursuant to § 118 (7) BAO, there is a legal claim that the assessment under tax law made in the information notice is used as a basis for the levying of the tax if the actual facts do not or only insignificantly deviate from those on which the information notice was based. It is certain that the complainant was issued a legally binding information notice in connection with the interest on the shareholder loan ***loan*** II. This information notice confirms that the loan granted has the character of hidden equity capital; an interest calculation for income tax purposes can therefore be omitted. It is also clear that the facts on which the tax office based the information notice have not changed. However, the tax authority now assumes that the factual elements on which the legal assessment of the information notice was based, and which were actually realised, were irrelevant for the assessment of the hidden equity in the present case.” Loan III “The separation principle is derived from the legal personality of a corporation, which allows for tax-effective service relationships between the shareholder and the corporation (cf. e.g. VwGH 28.04.2011, 2007/15/0031). The limit of the separation principle is the arm’s length principle (cf. Raab/Renner in Lachmayer/Strimitzer/Vock (eds.), Die Körperschaftsteuer (KStG 1988) (32nd ed. 2019) § 8 marginal no. 146). In connection with the granting of shareholder loans, conditions that are not arm’s length speaks in favour of hidden equity (cf. e.g. Ressler/Stürzlinger in Lang/Rust/Schuch/Staringer (eds.) KStG2 (2016) § 8 marginal no. 47). Conditions that are not customary for third parties speak against the existence of a genuine or serious shareholder loan (cf. e.g. VwGH 14.12.2000, 95/15/0127; 26.07.2006, 2004/14/0151). In the opinion of the authority concerned, only the lack of interest speaks in favour of the shareholder loan not being customary for third parties. A single indication was not sufficient to reclassify a shareholder loan as hidden equity. On the other hand, the subjective intention to repay the loan was to be regarded as the basis for the assumption that the loan was in fact debt and not equity. The fact that subjectively there was already an intention to repay at the time the shareholder loan was granted is not questioned in principle by the complainant, who himself points out in justification of the chosen model that a greater flexibility for a possible later repayment should be ensured. In addition, the chosen construction can also be explained on the basis of the company law legislation of ***Land***, according to which a repayment of equity capital is only possible in the context of a capital reduction or in the event of liquidation (cf. the legal opinion submitted on 22 February 2022). For the Federal Supreme Finance Court it is clear that the shareholder loan ***loan*** III was not granted at arm’s length (see in detail the explanations and assessment of the circumstantial evidence as part of the evaluation of the evidence). Thus, in the opinion of the Federal Fiscal Court, there is no shareholder loan to be recognised for tax purposes, but hidden equity. Since no interest is to be paid on equity capital (for tax purposes), the appeal is to be upheld on this point and the interest payment made by the authorities is to be reversed.” Click here for English translation Click here for other translation ...

In 2012, Flir Commercial Systems AB sold intangible assets from a branch in Belgium and subsequently claimed a tax relief of more than SEK 2 billion in fictitious Belgian tax due to the sale. The Swedish Tax Agency decided not to allow relief for the Belgian “tax”, and issued a tax assessment where the relief of approximately SEK 2 billion was denied and a surcharge of approximately SEK 800 million was added. An appeal was filed with the Administrative Court, In March 2020 the Administrative Court concluded that the Swedish Tax Agency was correct in not allowing relief for the fictitious Belgian tax. In the opinion of the Administrative Court, the Double tax agreement prevents Belgium from taxing increases in the value of the assets from the time where the assets were owned in Sweden. Consequently, any fictitious tax cannot be credited in the Swedish taxation of the transfer. The Court also considers that the Swedish Tax Agency was correct in imposing a tax surcharge and that there is no reason to reduce the surcharge. The company’s appeal is therefore rejected. An appeal was then filed with the Administrative Court of Appeal Decision of the Administrative Court of Appeal The Court upheld the decision of the Administrative Court and the assessment issued and the penalty added by the tax authorities. The Administrative Court of Appeal found that when assessing the amount of credit to be given for notional tax on a transfer of business, the tax treaty with the other country must also be taken into account. In the case at hand, assets were transferred to the company’s Belgian branch shortly before the assets were disposed of through the transfer of business. The tax treaty limited Belgium’s taxing rights to the increase in value accrued in Belgium after the allocation and a credit could be given up to an amount equal to that tax. In the case at hand, the company had claimed a notional credit for tax on the increase in value that had taken place in Sweden before the assets were transferred to Belgium, while the transferee company in Belgium was not taxed on the corresponding increase in value when the assets were subsequently disposed of, as the Belgian tax authority considered that the tax treaty prevented such taxation. The Court of Appeal held that there were grounds for back-taxation and the imposition of a tax surcharge on the basis of incorrect information. The information provided by the company was not considered sufficient to trigger the Tax Agency’s special investigation obligation and the tax fine was not considered unreasonable even though it amounted to a very large sum. Click here for English Translation Click here for translation ...

R. Sp. z o.o. had requested a binding ruling/interpretation regarding tax deduction for the price paid to a related entity under restructuring. The request was denied by the tax authorities, as the question – according to the authorities – could only be answered under an Advance Pricing Agreement. R. Sp. z.o.o brought the issue before the Administrative Court, where a decision in favour of R. Sp. z.o.o. was issued. An appeal was then filed by the tax authorities. Judgement of the Supreme Administrative Court The Court dismissed the appeal of the tax authorities. The tax authorities could not refuse to issue a binding ruling/interpretation on whether or not a price paid to a related party under restructuring was tax deductible. According to the Court such a question could not only be dispelled by the issuance of an Advance Pricing Agreement. Click here for English Translation Click here for other translation ...

The company is a producer of household chemicals and belongs to the R. B. (“the Group”), which is active in the manufacture and sale of consumer products in the home, health and hygiene products industry. The Company has entered into supply agreements for the goods it produces with Group companies. On the basis of the agreements, the Applicant sells goods produced by it to entities of the Group indicated by R. A. h. Companies and to R.B. [E.] B.V. The remuneration of the Polish company was determined based on a target margin – and if the profits were below or above the target margin, an invoice was issued subtracting or adding income to arrive at the target income. The tax authorities held that the quarterly “Transfer Pricing-adjustment” was not a transfer in regards of VAT. The company then filed a request for a individual interpretation (binding ruling), which was rejected by the authorities. A complaint was filed by the company to the Court of first instance, where the decision of the tax authorities was set aside. The tax authorities then filed an appeal to the Supreme Administrative Court. The tax authorities requested that the appealed decision be reversed in its entirety, that the Company’s complaint be examined and dismissed, or alternatively, in the event that the merits of the case are not sufficiently clarified, hthat the appealed decision be reversed in its entirety and the case be referred back to the Court of First Instance for re-examination. Judgement of the Supreme Administrative Court The Court decided in favour of the tax payer. “In the Company’s view, the issue requiring interpretation referred only to the question of the moment of making the correction, and not to the correctness of the adopted model for correcting income. Therefore, the Court of First Instance rightly pointed out that the prerequisites referred to in Article 165a of the Tax Code relating to the lack of possibility to institute proceedings were not exhausted in the case because the phrase “proceedings may not be instigated” used in Article 165a § 1 of the Tax Code should be referred to the C In view of this, the allegation of a violation of Article 145 § 1 (1) (c) of P.p.s.a. in conjunction with Article 165a § 1 and in conjunction with Article 14h and 14b § 1 of the Code of Civil Procedure should be deemed unjustified. ” … As already indicated above, the mechanism of “profitability” adjustment is in the case under consideration an assumption of factual nature and as such does not require the interpretation authority to confirm the correctness of its application by the Company.” ” Click here for English Translation Click here for other translation ...

Lux PPL SARL received a profit participating loan (PPL) from a related company in Jersey to finance its participation in an Irish company.  The participation in the Irish company was set up in the form of debt (85%) and equity (15%). The profit participating loan (PPL) carried a fixed interest of 25bps and a variable interest corresponding to 99% of the profits derived from the participation in the Irish company, net of any expenses, losses and a profit margin. After entering the arrangement, Lux PPL SARL filed a request for an binding ruling with the Luxembourg tax administration to verify that the interest  charge under the PPL would not qualify as a hidden profit distribution subject to the 15% dividend withholding tax. The tax administration issued the requested binding ruling on the condition that the ruling would be terminate if the total amount of the interest charge on the PPL exceeded an arm’s length charge. Later, Lux PPL SARL received a dividend of EUR 30 million from its participation in the Irish company and at the same time expensed interest on the PPL in its tax return in an amount of EUR 29,630,038. The tax administration found that the interest charged on the PPL exceeded the arm’s length remuneration. An assessment was issued according to which a portion of the interest expense was denied and instead treated as a hidden dividend subject to the 15% withholding tax. Lux PPL SARL filed an appeal to the Administrative Tribunal in which they argued that the tax ruling was binding on the tax administration. In regards to interest charge, Lux PPL SARL argued that according to the OECD TPG, if the range comprises results of relatively equal and high reliability, it could be argued that any point in the range satisfies the arm’s length principle. Judgement of the Administrative Tribunal The Tribunal found the appeal of Lux PPL SARL justified and set aside the decision of the tax administration. According to the Tribunal, the arm’s length interest charge under the PPL could be determined by a comparison with interest on fixed interest loan and any interest charge within the arm’s length range would satisfy the arm’s length principle. Click here for English translation Click here for other translation ...

In 2005 an agreement was entered between the UK tax authority and GE Capital, whereby GE Capital was able to obtain significant tax benefits by routing billions of dollars through Australia, the UK and the US. HMRC later claimed, that GE Capital had failed to disclose all relevant information to HMRC prior to the agreement and therefore asked the High Court to annul the agreement. In December 2020 the High Court decided in favour of HMRC. GE Capital then filed an appeal with the Court of Appeal. Judgement of the Court of Appeal The Court of Appeal overturned the judgement of the High Court and ruled in favour of GE Capital ...

In 2005 an agreement was entered between the UK tax authority and GE Capital, whereby GE Capital was able to obtain significant tax benefits by routing billions of dollars through Australia, the UK and the US. HMRC later claimed, that GE Capital had failed to disclose all relevant information to HMRC prior to the agreement and therefore asked the High Court to annul the agreement. The High Court ruled that HMRC could pursue the claim against GE in July 2020. Judgement of the High Court The High Court ruled in favour of the tax authorities ...

General Electric (GE) have been routing financial transactions (AUS $ 5 billion) related to GE companies in Australia via the UK in order to gain a tax advantage – by “triple dipping” in regards to interest deductions, thus saving billions of dollars in tax in Australia, the UK and the US. Before entering into these transactions, GE obtained clearance from HMRC that UK tax rules were met, in particular new “Anti-Arbitrage Rules” introduced in the UK in 2005, specifically designed to prevent tax avoidance through the exploitation of the tax treatment of ‘hybrid’ entities in different jurisdictions. The clearance was granted by the tax authorities in 2005 based on the understanding that the funds would be used to invest in businesses operating in Australia. In total, GE’s clearance application concerned 107 cross-border loans amounting to debt financing of approximately £21.2 billion. The Australian Transaction was one part of the application. After digging into the financing structure and receiving documents from the Australian authorities, HMRC now claims that GE fraudulently obtained a tax advantage in the UK worth US$1 billion by failing to disclose information and documents relating to the group’s financing arrangements. According to the HMRC, GE provided UK tax officers with a doctored board minute, and misleading and incomplete documents. The documents from Australia shows that the transactions were not related to investments in Australian businesses, but part of a complex and contrived tax avoidance scheme that would circulate money between the US, Luxembourg, the UK and Australia before being sent back to the US just days later. These transactions had no commercial purpose other than to create a “triple dip” tax advantage in the UK, the US and Australia. HMRC are now seeking to annul the 2005 clearance agreement and then issue a claim for back taxes in the amount of $ 1 billion before interest and penalties. From GE’s 10 K filing “As previously disclosed, the United Kingdom tax authorities disallowed interest deductions claimed by GE Capital for the years 2007-2015 that could result in a potential impact of approximately $1 billion, which includes a possible assessment of tax and reduction of deferred tax assets, not including interest and penalties. We are contesting the disallowance. We comply with all applicable tax laws and judicial doctrines of the United Kingdom and believe that the entire benefit is more likely than not to be sustained on its technical merits. We believe that there are no other jurisdictions in which the outcome of unresolved issues or claims is likely to be material to our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties.” The English High Court decision on whether the case has sufficient merit to proceed to trial: “150. For the above reasons, I refuse the application to amend in respect of paragraphs 38(b) and 38(e) of APOC and I will strike out the existing pleading in paragraph 38(e) of APOC. I will otherwise permit the amendments sought by HMRC insofar as they are not already agreed between the parties. Specifically, the permitted amendments include those in which HMRC seeks to introduce allegations of deliberate non-disclosure, fraud in respect of the Full Disclosure Representation, a claim that the Settlement Agreement is a contract of utmost good faith (paragraphs 49B and 53(ca) of APOC) and the claim for breach of an implied term (paragraphs 48 and 49 of APOC). 151. As to paragraph 68(b) of the Reply, I refuse the application to strike it out. To a large extent this follows from my conclusion in relation to the amendments to the APOC to add allegations of deliberate failure to disclose material information. In GE’s skeleton argument, a separate point is taken that paragraph 68(b) of the Reply is a free-standing plea that is lacking in sufficient particulars. I do not accept this: there can be no real doubt as to which parts of the APOC are being referred to by the cross-reference made in paragraph 68(b)(ii). 152. The overall result is that, while I have rejected the attempts to infer many years after the event that specific positive representations could be implied from limited references in the contemporaneous documents, the essential allegation which lay at the heart of Mr Jones QC’s submissions – that GE failed to disclose the complete picture, and that it did so deliberately – will be permitted to go to trial on the various alternative legal bases asserted by HMRC. I stress that, beyond the conclusion that there is a sufficient pleading for this purpose, and that the prospects of success cannot be shown to be fanciful on an interlocutory application such as this, I say nothing about the merits of the claims of deliberate non-disclosure or fraud.” ...

R. Sp. z o.o. had requested a binding ruling/interpretation regarding tax deduction for the price paid to a related entity under restructuring. The request was denied by the tax authorities, as the question – according to the authorities – could only be answered under an Advance Pricing Agreement. R. Sp. z.o.o brought the issue before the Administrative Court Judgement of the Administrative Court The Court decided in favour of R. Sp. z.o.o. According to the Court, the tax authorities could not refuse to issue a binding ruling/interpretation on whether or not a price paid to a related party under restructuring was tax deductible. Click here for English Translation Click here for other translation ...