Pharma and Life Sciences Tax News - Vol. 11, No. 2:

Business restructuring, transfer pricing and PE’s in Spain: Supreme Court decision

Many multinationals companies, including pharmaceutical, life science and medical device companies are using Swiss principal companies to manufacture and distribute their products. In this regard, tax executives of these companies are careful in setting up these structures to avoid having permanent establishments outside of Switzerland for their principals. That is why the recent case below should be of interest to tax executives using such structures.

On January 12th, 2012, the Spanish Supreme Court delivered its decision on a case concerning a Swiss principal company that manufactured and distributed its products in Spain through a Spanish subsidiary. The Supreme Court upheld the decision of the lower courts and concluded that the Swiss company had a Permanent Establishment (PE) in Spain to which all the Spanish sales should be allocated.

Business restructuring, transfer pricing and PE's in Spain: Supreme Court decision