Axel Hilling

Docent

The Pricing of Financial Instruments in Tax Disputes

Författare

Axel Hilling
Niklas Sandell
Anders Wilhelmsson

Summary, in Swedish

The pricing of uncertainties, when establishing the market value of financial instruments, is problematic in tax
litigation since the outcome of the litigation is binary. Different values can be equally correct, depending on the
choice of models, assumptions regarding model parameters and forecasting techniques. The purpose of this
article is to illustrate the challenges for tax administrations and courts in terms of the need and ability to price
uncertainties in the market valuation of financial instruments. The authors illustrate the complexities with a case
based on a publicly traded instrument, which gives a lower limit of the uncertainty associated with valuation.
The authors then problematize the valuation of over-the-counter traded and non-publicly traded instruments,
which, due to uncertainty, tends to create leeway for tax arbitrage. This illustration shows the necessity to further
understand the manner in which courts reason, the dependency on experts and the use of models.

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