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How to deal with adjustments of deductions in case of retrospective rebates or transfer pricing adjustments

In the case of a retrospective discount or transfer pricing adjustment there may be VAT consequences for both parties involved in a transaction. In the recently decided World Comm Trading case, the European Court of Justice (ECJ) ruled that if a rebate is given on an overall invoice for both intra-Community and domestic supplies, the customer must correct the VAT deducted. This judgment is also of importance for retrospective transfer pricing adjustments.

Source BDO

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