RASK represents client in landmark case over economic interpretation in taxation.
The Administrative Court and the Circuit Court agreed with the positions of the tax authority. The Supreme Court, however, upheld the cassation appeal of RASK’s client, limiting the tax authority’s taxation competence also in other similar cases. More specifically, the court of highest instance explained that if a concealed transaction does not bring any tax advantage, the tax authority has no basis for imposing the tax. The court also explained that the tax cannot be imposed on the sole ground that the tax authority believes that the purpose of the transaction under consideration in the tax procedure is to obtain some illegal benefit from another administrative authority.
The Supreme Court’s decision restricted the tax authority’s power of intervention under Section 83 (4) of the Taxation Act.