PwC

Tax & Legal

    Tax & Legal

    Foreign Tax Act: Income adjustment in violation of community law?


    The Lower Tax Court of Rhineland Palatinate held that the income adjustment provision of the Foreign Tax Act as amended in 2003 might not be in accordance with EU-law and has referred the case to the ECJ for further clarification. The focus of the judicial review is on the tax consequences of a business relationship with a related party and where the terms do not meet the third party comparison test.