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