The Court of Justice of the European Union (CJEU) on 7 April 2022 released its judgement in the Berlin Chemie case (C-333/20) on the concept of a fixed establishment for VAT purposes. The case had been referred to the CJEU by the Curtea de Apel Bucureşti (Court of Appeal, Bucharest). The CJEU ruled that a subsidiary providing exclusive marketing and publicity services to a group company acting as central entrepreneur does not create a fixed establishment for VAT purposes of the central entrepreneur in the subsidiary’s country of residence. In its considerations, the CJEU explicitly acknowledges that the same resources cannot be used simultaneously by the subsidiary to provide services and by the foreign group company to receive those services. The ruling provides clear guidance for tax authorities around Europe to define their position on the VAT fixed establishment concept, which hopefully will restore legal certainty for taxpayers.
Source Deloitte
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