Tax Treaty Case Law around the Globe 2017
1. Aufl. 2018
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S. 107United States: It is Permissible to Apply the ALS on a Consolidated Basis
Yariv Brauner
1. S. 108Introduction
This interesting case was eventually settled, and filed with the Tax Court on 19 July 2016, yet an important factor in the settlement was the denial of the earlier motion for partial summary judgment filed by the petitioner (“Guidant”) earlier in the year. Judge Laro ruled then that the government’s position; making adjustments to Guidant’s transfer prices on a consolidated group basis, without accounting separately for each controlled entity, was not necessarily arbitrary, capricious, and unreasonable as a matter of law. Similarly, he ruled that it had been acceptable for the government to aggregate one or more related transactions instead of making specific adjustments with respect to each type of transaction involved in the dispute.
2. Facts of the Case
The Guidant Corp. is a US corporation that from 2001 through 2006 was the parent of an affiliated group that included various US subsidiaries, with which it filed a consolidated return. Boston Scientific Corp. (BSC) acquired Guidant Corp. on . Guidant also owned a Dutch corporation that held another Dutch corporation an...