May 30, 2012 - Assignment

Interdirect Tel wins VAT dispute in Administrative Court of Appeal

Interdirect Tel Ltd, an Ireland-based telecommunication services provider, has won a SEK 134 million tax dispute with the Swedish Tax Agency regarding output VAT on the sale of telecommunication services.

In a 2 June 2009 decision, the Swedish Tax Agency imposed SEK 112 million in output VAT and SEK 22 million in tax surcharges on Interdirect Tel Ltd. The Swedish Tax Agency argued that the company had a fixed place of establishment in Sweden via a Swedish group company, and that the telecommunications services the company had provided therefore should be deemed to be supplied in Sweden. The company appealed the Swedish Tax Agency’s decision on the grounds that it has no fixed place of establishment in Sweden to which the services may be related. The Administrative Court of Appeal in Gothenburg has now ruled in favour of the company and revoked the Swedish Tax Agency’s decision.

Interdirect Tel Ltd is a subsidiary of IDT Corporation, a global telecommunication services company that provides retail and wholesale telecommunications services and products, including pre-paid and rechargeable calling cards and wholesale carrier services. The company’s stock trades on the New York Stock Exchange.

Interdirect Tel Ltd was represented by Mannheimer Swartling in the dispute. The firm’s team included partner Anders Erasmie and associate Fredrik Berndt.