US life insurance company John Hancock has lost its Tax Court case concerning lease-in-lease-out (LILO) and sale-in-lease-out (SILO) transactions, meaning the Internal Revenue Service (IRS) continues its record of having won all cases on this issue. However, the IRS may have caused itself future difficulties by making an economic substance argument.
The Bombay High Court has said that India’s authority for advance rulings (AAR) may not refuse to deliver a decision for taxpayers based on a suspicion that they have misrepresented the facts, in a case involving Mahindra BT Investment (Mahindra) and AT&T International (AT&T).
Orange France is lodging an appeal with the Administrative Appeal Court of Versailles after it lost a case in which it argued that when an impairment reserve was not deducted for tax purposes, the cancellation of that reserve should not be taxable in any circumstances.
Italian taxpayers could receive significant benefits if they enter into the tax authority’s cooperative compliance relationship. These could include removing the need for preventive rulings to enable them to deal with entities in blacklisted jurisdictions, less data reporting requirements around transactions and a removal of the requirement to provide bank guarantees in relation to tax credits.
The European Court of Justice (ECJ) has followed its decisions in previous exit tax cases such as National Grid Indus by declaring Denmark’s rules against EU law, but has added that member states are permitted to define additional taxable events to charge taxpayers whose assets may never be realised.
Taxpayers, advisers and academics have expressed concern over the impact of European Court of Justice (ECJ) rulings on member states’ tax policy in a UK government report about EU membership.
