The number, complexity and scope of contentious disputes with tax authorities is increasing and an ever-greater number of clients are mindful of the possibility of tax litigation. Our tax team works closely with our dispute resolution lawyers to provide advice and guidance at all stages of a potential dispute, from an opinion on a filing position, to advice on responding to enquiries or requests for documents from the tax authority, to negotiation, settlement or, where appropriate, litigation. Our contentious work also extends to managing tax risk and compliance obligations in an increasingly challenging environment.
Recent contentious tax cases include advising:
- Vodafone in relation to its ground-breaking challenge to the compatibility of the Controlled Foreign Companies rules with EU law.
REWE Zentralfinanz e.G. before the European Court of Justice in tax litigation with fundamental importance for German tax law. REWE Zentralfinanz claimed that losses stemming from partial write-downs to the value of its holding in a Dutch subsidiary could be offset against other positive income. As a consequence of the REWE Zentralfinanz judgment the distinction between "good" and "bad" foreign activities in another member state no longer has significance for tax treatment. Other provisions, where the offsetting of foreign-sourced losses is limited or excluded, are liable not to be upheld.