CJEU - Recent Developments in Direct Taxation 2021

S. 341. Introduction

The case concerns the interpretation of various general principles of EU law as well as provisions of the Charter of the Fundamental Rights of the European Union (“Charter”). It primarily addresses the scope of application of these principles and fundamental rights in the context of acts of a Member State in a tax audit leading to the determination of tax arrears in corporate income tax. The underlying domestic procedure that gave rise to the preliminary ruling request revolves around the interpretation of accounting principles.

2. Facts of the case

The applicant, MARCAS MC Szolgáltató Zrt. (“MARCAS MC” or “taxpayer”), licensed the use of its trademark to its affiliated undertakings, being tax residents in Portugal, in exchange for a royalty payment. Based on the contractual arrangements, the royalty amounted to 2 % of the sales revenue of the affiliated undertakings. MARCAS MC issued quarterly invoices based on estimates of quarterly sales figures of the affiliated undertakings for that quarter. Whenever the estimated figures and the actual sales figures deviated, MARCAS MC included a correction in the invoice for the subsequent period, to reflect the difference, with...