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for the purpose of reducing foreign tax. In connection with the
HESA joint venture, the Hyatt International group provided the
local staffing and management talent, while VIS provided the
hotel contracts. We have found that HHK and HS played important
roles in both of these functions within their territories. Thus,
the relationship between HIC and VIS does not resemble the
relationship between HIC and HHK or HS. In addition, the
ownership share of HIC (Mexico) in HESA was 49 percent. A
corporate shareholder/owner is entitled to a portion of any
dividends distributed. As HHK and HS are wholly owned
subsidiaries of HIC, HIC would be entitled to 100 percent of
their dividends. Those considerations, however, do not address
the share, if any, of operating income that HIC should receive.
In these respects, the BVS report was not helpful and did not
assist us in our consideration of an appropriate arm’s-length
consideration for the services provided by HIC.34
Once again, we are left stranded in a “sea of expertise” and
must navigate our own way through a complex record to decide what
constitutes an appropriate arm’s-length consideration. For the
reasons we have explained, the parties' notice and trial
positions do not properly address the type of circumstances we
34 Since the parties have not provided adequate factual
basis for differentiation among the several years in issue, we
disregard BVS’ approach of allocating different percentages in
different years.
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