Victory against tax authorities regarding application of the GAAR

Our tax team successfully represented the client in a tax dispute before the Vilnius Regional Administration Court.

The client sold shares of a very profitable company, which excavates and processes high-quality raw materials, to his own newly established company for EUR 1.5 million. After this transaction, the newly established company received dividends and paid to the client for the shares. The tax authorities applied the general anti-abuse rule (GAAR) and considered that the main purpose of the sale of shares was tax avoidance. Thus, the tax authorities taxed the sale of shares as the distribution of dividends. However, our team successfully convinced the court that the GAAR cannot be applicable if the transaction is not a wholly artificial arrangement and reflects economic reality.

Our tax team regularly develops and negotiates successful resolutions during the administrative process in various substantive matters ranging from domestic and cross-border taxation to VAT and customs duties.  Our tax lawyers have a reputation for delivering successful outcomes for the taxpayers through settlement or minimizing the score of tax disputes, resolving them cost-effectively, and, if necessary, litigating.ce.