The Court made the following further observations to assist the referring court to reach its final conclusion:
- The fact that the German company was the sole customer of its Romanian affiliate would not be determinative of whether the affiliate’s human and technical resources constituted the taxpayer’s fixed establishment.
- The extent of the authority of the putative fixed establishment to take decisions for the main establishment and the fact that the affiliate’s services were capable of having a direct influence on the volume of the sales of the German company was not relevant to the question of whether a fixed establishment existed in the form of the human and technical resources of the affiliate. In any case, the Romanian company was not involved in the sale and supply of products, limiting their role to collection of orders from new Romanian wholesale distributors then forwarded to the German company.
Comment: Another important Court decision which reaffirmed the scope (essentially to identify the territory where a supply of service has to be taxed for VAT purposes) and concept of the “fixed establishment” referred by the EU VAT Directive (art. 44) and art. 11 of the Implementing Regulation 282/2011
Source DLA Piper
