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The biggest TP cases of 2021 so far

Every case sets a standard

Companies including Amazon, Cameco and Engie have fought their corner in court and landmark judgments have been handed down. Here, ITR reviews some of the most important transfer pricing (TP) cases in 2021 so far.

Despite the COVID-19 pandemic, the first half of this year has been a busy one for tax courts. Some multinational companies, including Amazon and Cameco, have won significant court cases on TP, while the courts have ruled against companies such as Nike over EU state aid claims.

Businesses continue to prepare for a predicted wave of audits following the pandemic, as well as a rise in tax disputes. Tax authorities around the world are showing no sign of backing off on transfer pricing, and tension over corporate TP strategy is likely to increase.

Taxpayers with similar arrangements to the companies included in this list can learn a lot by looking at these cases, many of which will set a precedent for future treatment of multinational companies. When it comes to tax controversy, transfer pricing is still the hot topic.


Amazon is up for another round with the European Commission over its transfer pricing affairs. This is despite the company winning its case earlier this year. The Commission is determined to win since the case will set a strong precedent for other multinational companies operating through Luxembourg.

The European General Court ruled on May 12 that Amazon’s cost-sharing arrangement in Luxembourg did not breach EU competition law. The US company will not be expected to pay €250 million ($296 million) in back taxes.

The European Commission did not prove that Amazon had secured an “undue reduction” in its tax base, the General Court found. As a result, the court found that there was “no selective advantage” in favour of Amazon’s Luxembourg-based subsidiary.

The court found that the Commission’s 2017 findings on the case were “incorrect in several respects”. This is a serious blow to the Commission’s efforts to curtail what it sees as abusive tax structures perpetrated by multinational enterprises (MNEs) such as Apple.

However, on the same day as the Commission lost the Amazon case, it won a similar state aid case against the French utility company Engie. The conflicting rulings imply there is still hope for the European Commission, but a victory against Amazon is far from certain.


The Supreme Court of Canada declined the Crown’s appeal application in the Cameco case on February 18. This secures a historic victory for the taxpayer and marks the end of a 13-year-long TP case.

The Saskatoon-based mining company was quick to comment on the result. “It’s another win for Cameco in this long-running tax dispute,” said Tim Gitzel, president and CEO of Cameco. “We have consistently followed the rules and complied with both the letter and intent of the law.”

“This was confirmed unequivocally through the court process, and we are happy to have these three tax years concluded in our favour,” he said.

The Federal Court of Appeal (FCA) ruled to uphold the September 2018 verdict of the Tax Court of Canada, which found that Cameco’s transactions and use of subsidiaries in Luxembourg and Switzerland to trade uranium in Europe were in line with the arm’s-length principle (ALP) and Canada’s TP rules.

The Crown was seeking leave to appeal the FCA decision on the grounds that the “recharacterisation” part of the TP rules in the Canadian Tax Act contains an objective test to determine the arm’s-length rate of a given transaction.

Cameco expects the CRA to pay back C$5.5 million ($4.3 million) plus interest for taxes the company paid on previous reassessments for 2003, 2005, and 2006, on top of more than C$10 million in legal fees and almost C$18 million in disbursements.


French utility company Engie lost its appeal against the European Commission over claims that the company gained an unfair advantage from two Luxembourg tax rulings. The multinational company is expected to pay €120 million in back taxes.

In contrast to the Amazon case, the General Court ruled on May 12 that the Luxembourg tax authority had granted a “selective tax advantage” to affiliates of the Engie group.

“The tax rulings endorsed two financing structures put in place by Engie that treated the same transaction both as debt and as equity, with the result that its profits remained untaxed,” said Margrethe Vestager, executive vice president of the European Commission.

“The Commission is using all tools at its disposal to fight unfair tax practices. State aid enforcement works hand in hand with the EU’s legislative action to address loopholes and ensure transparency in fiscal matters,” she added.

There is still time for appeals to be launched. Amazon’s win in a similar case, detailed above, could encourage Engie to appeal against the Commission. On the other hand, the Commission could take its win against Engie as a sign that it should risk appealing the Amazon case.


The European General Court ruled on July 14 that the EU state aid investigation into Nike’s Dutch tax arrangements should go ahead. Case T-648/19 concerns the company’s subsidiaries Nike European Operations Netherlands BV (NEON) and Converse Netherlands BV (CN).

The European Commission launched an investigation into whether the Dutch tax authority granted illegal state aid to Nike in tax rulings from 2006, 2010, and 2015. The company denied that it received illegal state aid and set out to prevent the investigation.

“Nike is subject to and rigorously ensures that it complies with all the same tax laws as other companies operating in the Netherlands,” the company said in a statement. “We believe the European Commission’s investigation is without merit.”

Nike has claimed that the Commission’s preliminary assessment contained legal errors. The company also claimed that the EU failed to provide “sufficient reasons for finding that the contested measures fulfil all elements of state aid”. Yet the court dismissed this argument.

This investigation adds Nike to the mounting list of multinationals disputing the findings of EU state aid investigations. The company may be preparing to fight another day in court if the Commission decides that the tax rulings constituted unlawful state aid.


The High Court of Australia refused the Tax Commissioner’s application for special leave to appeal the Glencore case on May 21. The Commissioner of Taxation applied to appeal the Full Federal Court’s 2020 decision in the case.

The High Court would consider an appeal if a question or principle of law is raised, but the Commissioner’s application failed to do so. The court turned down the application on these grounds. Therefore, the 2020 decision stands.

However, the Commissioner argued that the principle at stake was the arm’s-length standard. It is alleged that the taxpayer had not sufficiently demonstrated the considerations behind its inter-company arrangement.

Nevertheless, the High Court found that the terms of the agreement in place were based on transactions on the open market and supported by expert evidence. As a result, the court ruled that the Commissioner could not overturn the findings of fact upheld by the Full Federal Court.

Glencore has the curious distinction of being the first company to face a court battle over the Paradise Papers leaks. This is why the case is so important for other multinationals.

These disputes may have brought greater clarity for taxpayers, but not all clarity has been good news. Cameco and Glencore may have won their cases, but other taxpayers are less fortunate.

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