Fixed establishment for VAT – Focus on toll manufacturer structures

In the last years, we noted that the Romanian tax authority increased its scrutiny on the fixed establishment (“FE”) topic. The cases encountered by us referred to companies operating in a multitude of industries, such as pharma, automotive or retail. The tax authority’s argumentation for the FE assessments was generally based on certain interdependencies between the foreign company and its local subsidiary, with the latter intervening in the supplies performed by the foreign entity.
At the current moment, it appears the tax authority’s focus is on toll manufacturer structures (where the principal is a non-resident entity) having targeted actions in this area – as detailed in the next section.

Source Deloitte

See also Recent developments on the issue of Fixed Establishments in the European Union: Part 2

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