News - Tax cases

Less common ground

The Special Commissioners referred to the European Court of Justice a question arising in an action brought by Cadbury Schweppes plc in June 2004. The question related to the UK's controlled foreign companies legislation i.e. whether the attribution of income of a foreign subsidiary to the UK parent was compatible with the EC Treaty.
Cadbury Schweppes subsequently applied for a direction that unsubstantiated allegations of fact contained in the UK's written observations would have to be made good once the matter was remitted back to the Special Commissioners. Cadbury was concerned that the written observations would lead the courts to think that more common ground between the parties existed than actually did. It objected in particular to two of its subsidiaries in Ireland being characterised as being purely for fiscal purposes and having no commercial or economic purpose. HMRC considered that the words were not misleading...