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Symantec Wins USD545m Tax Case

by Leroy Baker,, New York

16 December 2009

Security and storage software maker Symantec Corp., known for its Norton anti-virus software, has been saved from paying a potential tax claim of USD545m as a result of a US Tax Court decision in the firm's favor.

Symantec's tax problem arose from its USD10.25bn acquisition in 2005 of Veritas Software Corp. Veritas had been the subject of a US Internal Revenue Service (IRS) investigation, and in 2006 Symantec reported that it had received a Notice of Deficiency from the IRS, which originally claimed USD900m in additional taxes, plus interest and penalties relating to the transfer pricing of a technology license agreement with an Irish subsidiary.

Presiding Judge Maurice Foley described the IRS's calculations in determining Veritas' back taxes as "arbitrary, capricious and unreasonable." The same judge presided over a similar case between the IRS and semiconductor maker Xilinx Inc., in which Xilinx won its case but later was found by an appeals court to owe more than USD100m in back taxes.

This comprehensive report in our Intelligence Report series examines the global and national landscapes in which companies can use transfer pricing to improve their after-tax returns, including summaries of recent developments in design of the corporate supply train, the usefulness of 'offshore' in international corporate tax planning, and a section covering the spread of DTAAs and CFC laws. It is available in the Lowtax Library at and a description of the report can be seen at

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