High Court rules in favour of pharmaceutical multinational in landmark transfer pricing case

During the proceedings before the National Tax Tribunal the taxpayer had obtained an expert valuation from two court-appointed experts, but the National Tax Tribunal overruled the experts' opinion on two major points concerning the valuation which led to a substantial deviation in value.

The case was brought before the courts by the taxpayer where the Western High Court has now ruled in favour of the company. 

First, the High Court agreed that the company's transfer pricing documentation was sufficient.

On the first main disputed point - whether the group's own growth expectations in its forecasts should be used - the High Court agreed with the experts that an independent buyer would not have accepted the company's own forecasts 1:1. The experts' adjustments to the forecasts were therefore to be applied to the valuation. 

And on the second major point, the High Court also fully agreed with the experts that only 50 % of the so-called tax amortization benefit, in the specific circumstances, should be included in the valuation.

The case was argued by Jef Nymand Hounsgaard and Mathias Kjærsgaard Larsen assisted by Anders Endicott Pedersen.