SDI Netherlands B v. v. Commissioner
United States Tax Court
P was the licensee of a Bermuda corporation (SDI Bermuda) of worldwide rights to use computer software. P in turn licensed those rights for use in the United States to a U.S. corporation (SDI USA). P received royalties from SDI USA as well as from other licensees. P paid specified percentages of the royalties it received from its licensees to SDI Bermuda. P, SDI USA, and SDI Bermuda were members of a group of corporations under common control.
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P was the licensee of a Bermuda corporation (SDI Bermuda) of worldwide rights to use computer software. P in turn licensed those rights for use in the United States to a U.S. corporation (SDI USA). P received royalties from SDI USA as well as from other licensees. P paid specified percentages of the royalties it received from its licensees to SDI Bermuda. P, SDI USA, and SDI Bermuda were members of a group of corporations under common control. Held, the two licenses were separate and distinct from each other with the result that the royalties paid to P by SDI USA did not retain their U.S.…
1Opinion of the Court
OPINION
Tannenwald, Judge:
Respondent determined deficiencies in Federal withholding taxes and additions to tax as follows:
Year Deficiency Additions to tax sec. 6651(a)(1)1
1987 $678,449 $169,612
1988 881,067 220,267
1989 825,513 206,378
1990 641,837 160,459
The issue in dispute is whether petitioner, a corporation organized under the laws of the Kingdom of The Netherlands, is liable for withholding taxes on royalties paid to a Bermuda corporation, and additions to tax for failure to file Forms 1042 for each of the years in issue.
All the facts have been stipulated. The stipulation of facts and…
2Cases cited26 opinions
- Pallottini v. CommissionerUnited States Tax Court · 1988
- Jarvis v. CommissionerUnited States Tax Court · 1982
- Achiro v. CommissionerUnited States Tax Court · 1981
- Estate of Emerson v. CommissionerUnited States Tax Court · 1977
- Borchers v. CommissionerUnited States Tax Court · 1990
21 more not listed; retrieve them via the Exa API.
3Cited by3 opinions
- SDI Netherlands B v. f.k.a. SDI International B v. v. CommissionerUnited States Tax Court · 1996
- SDI Netherlands B v. v. CommissionerUnited States Tax Court · 1996
- Vianello v. Comm'rUnited States Tax Court · 2010