Monthly Archives: December 2009

UK: Tax Case: Prolab Nutrition Europe Limited TC00269

Prolab Nutrition Europe (TC00269): the customs value of goods for import duties includes any royalties and licence fees paid as a condition of sale (Article 29(1)/Article 32(1) of Council Regulation 2913/92 (the Community Customs Code).   The court held that payments for exclusive distribution rights are not royalties or licence fees for the purposes of determining customs value.

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US: IRS cost-sharing adjustment overruled

Veritas Software Corp. v. Commissioner (US case 133 TC 14): The U.S. Tax Court has held that the IRS’s $1.675bn adjustment to a cost sharing buy-in payment received by Veritas Software Corp. from an Irish affiliate was “arbitrary, capricious, and unreasonable”.

The tax court also confirmed that Veritas’ use of the comparable uncontrolled transactions method (albeit with some adjustments imposed by the court) was the best way to calculate transfer pricing on the buy-in payment.

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