Court Rules Tax Evasion Through Artificial Corporate Structure on Jersey Constitutes Abuse of Law

• The court ruled there was abuse of law due to artificial structures aimed solely at tax benefits.
• The Swedish company X was part of a structure involving a Jersey company and a Dutch branch.
• The Dutch branch provided services from 2013 to mid-2018, claiming VAT deductions.
• The Jersey entity was not liable for VAT on these services.
• The tax inspector claimed the structure was purely artificial, leading to a legal challenge.
• The court found the structure artificial, denying X the right to VAT deductions.
• Penalties were annulled due to a defensible position.
• The court confirmed the artificial nature of transactions involving debt portfolios.
• The transactions were primarily for tax advantages, lacking economic reality.
• The court upheld the lower court’s decision.

Source: taxlive.nl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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