Monday, 1 August 2016

Medtronic Tax Court decision rejects IRS’s effort to treat licensee as routine manufacturer

The U.S. Tax Court on June 9, 2016, in Medtronic, Inc. v. Commissioner, T.C. Memo No. 2016-112 (2016), ruled substantially in favor of medical device manufacturer Medtronic in its transfer pricing dispute with the IRS, overcoming the IRS’s claim that the U.S.-based parent should have received substantially higher royalty payments from its related Puerto Rican subsidiary in both 2005 and 2006.  The IRS was seeking adjustments that would have increased Medtronic’s tax obligations by approximately $1.3 billion.

Source & more info: PwC