A fixed establishment is a secondary establishment of a business in a country other than the country of the principal establishment. Regarding the supply of services to businesses, the main VAT rule is that the service is subject to VAT in the country where the customer is established. If a fixed establishment purchases the service, the place of supply is the country where the fixed establishment is located. For the supply of services to a private consumer, the main rule is that a service is subject to VAT where the supplier is established. Again, if the fixed establishment supplies the service, the place of taxation is where the fixed establishment is located. It is therefore essential to determine whether a customer or a performing entrepreneur has such a fixed establishment. If an entrepreneur has permanent access to personnel and resources to perform (or purchase) services, this qualifies as a fixed establishment. In the Dong Yang Electronics case, the European Court of Justice (ECJ) ruled that a subsidiary may also qualify as a fixed establishment. However, this is not automatically the case.
Source BDO
Latest Posts in "European Union"
- ViDA: The Fiscal-Digital Police State is Coming
- Comments on EGC T-383/25: Transport for repair of Swiss boat to Germany involves import
- Peppol ViDA Tax Data Document (TDD): The Blueprint for EU Real-Time VAT Reporting
- ViDA and the Fundamental Principles of EU VAT: A Reformed Edifice on Unchanged Foundations
- FISC Committee Meeting – VAT Fraud and the Future of the Reverse Charge Mechanism
