Israeli Court Holds IP Transaction Amounts to Transfer of Entire Business Operations in Microsoft Transfer Pricing Dispute

The Israel Tax Authority has announced a "precedent-setting" ruling of a Central District Court issued 6 June 2017 concerning whether an IP transaction following a share transaction was a simple sale of IP or rather a  transfer of entire business operations. The case involved Israel-based start-up Gteko Ltd., which was acquired by Microsoft Corporation in 2006 through a USD 90 million share acquisition. After the share acquisition, Microsoft hired all of the Gteko staff and eight m…