Avago Technologies Trading Ltd (ATTL), a subsidiary of Broadcom Inc., faced an adverse ruling from the Assessment Review Committee (ARC) in Mauritius regarding a transfer pricing case. The ARC sided with the Mauritius Revenue Authority (MRA) on the arm's length nature of royalty fees.
The MRA contended that royalty payments made by ATTL to its related entity, GEN IP, in Singapore were not at arm's length and constituted a tax avoidance scheme. The ruling resulted in a substantial tax adjustment of USD 107 million, along with additional penalties and interest.
This case highlights increasing global scrutiny on transfer pricing arrangements, particularly those involving intellectual property. The outcome could have financial implications for Broadcom and sets a precedent for multinational corporations operating in lower tax jurisdictions.
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