EU approach on the concept of intervention of the VAT fixed establishment with specific focus on Italian and Czech approach and latest developments

This article outlines the main features of the concept of intervention of the VAT fixed establishment (FE) at EU level with a specific focus on Italy and Czech Republic approach and latest domestic developments. Moreover, the criticalities deriving from the lack of a uniform approach at the Member State level are also considered.

The intervention of a FE in another Member State may have implications for businesses in relation to the place of supply of services and the liability to pay VAT in a Member State. There is, however, no clear guidance across the EU, as to when an FE is deemed to have “intervened” in a transaction.

The 10 December 2020 Conversant/Valueclick ruling in France highlighted the VAT uncertainties businesses face when they operate a branch in another Member State.

In this client alert we will particularly highlight the domestic rules of Italy & the Czech Republic. While the focus of the alert is on these jurisdictions, the key take-away applies to all Member States: uniform and harmonized guidance is missing.

Source Baker & McKenzie




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