Trinidad & Tobago_ Deductibility on the management charge
The judgement for the pricing agreement was recently released.
The case was determined in favor of the taxpayer (see page 213), however the decision was not based on law, but rather on a balance of probabilities and from testimony from witnesses, due to the lack of documentation from the period in question.
As such, if the company wishes to claim the expenses for the prior years, we have also summarized the sums treated as non-deductible amount
G. DISPOSITION
83. For reasons as have been enunciated hereinabove, it is therefore our decision that: -
a. the assessment made by the Respondent on the Appellant for the year of income 2005 with respect to Corporation Tax and in which the Respondent assessed the Appellant to additional sales revenue of $439, 183,501 and to have also reduced the Appellant’s losses carried forward from $73,754,282 to nil to be unjustified as a matter of fact and law; and
b. the total adjustments to sales made by the Respondent on the Appellant for the year of income 2005 in the amount of $439,183,501 to be unjustified as a matter of fact and law and as a consequence the assessment made by the Respondent on the Appellant to an additional Green Fund Levy liability in the amount of $439,183.00 is to be reversed.
84. These consolidated appeals are therefore allowed.
Decision hinged on the balance of probabilities and witness testimony due to a lack of historical documentation, rather than strict legal interpretation
답글삭제1. "Decision hinged on...": This means the outcome of the case depended entirely or primarily on the following factors. These were the crucial elements that swayed the judge's or jury's decision.
2. "...the balance of probabilities...": This is a standard of proof used in civil cases (as opposed to the "beyond a reasonable doubt" standard in criminal cases). It means that the court found it more likely than not that the taxpayer's version of events was true. It doesn't require absolute certainty, just that the evidence suggests their claim was more probable than the alternative.
3. "...and witness testimony...": This refers to statements made under oath by individuals who had relevant information about the situation. In this case, it implies that the court gave significant weight to what these witnesses said. Their accounts likely supported the taxpayer's position.
4. "...due to a lack of historical documentation...": This is the crucial reason why the court had to rely on the balance of probabilities and witness testimony instead of concrete legal arguments based on solid records. Because the company didn't have sufficient documentation from the period in question (e.g., contracts, invoices, internal communications), the court couldn't definitively determine the situation based on written proof.
In simpler terms: Because the company didn't have good records from the past, the court couldn't make a decision based on clear legal rules or written evidence. Instead, they had to weigh up what was more likely to have happened based on what the witnesses said. The witnesses' accounts apparently made the taxpayer's version of events seem more probable than not, leading to the favorable judgment.
<=> The key takeaway is that the lack of documentation forced the court to rely on a less definitive standard of proof (balance of probabilities) and the subjective recollections of witnesses. This is why the victory wasn't based on a strong legal precedent that the company could rely on in the future.