Facts
- Cabot Switzerland GmbH, a company under Swiss law, sells carbon-based products and is identified for VAT purposes in Belgium.
- Cabot Switzerland has a tolling contract with Cabot Plastics, a Belgian commercial company that is legally independent but financially linked as it is owned by Cabot Holding I GmbH, which is 100% owned by Cabot Lux Holdings Sàrl, which also holds all the shares in Cabot Switzerland.
- Cabot Plastics processes raw materials into products used in the manufacture of plastics for Cabot Switzerland and provides additional services such as storage, technical checks, recommendations, and administrative support.
- Cabot Plastics brought proceedings before the Tax Ruling Commission in Belgium, which ruled that Cabot Switzerland did not have a fixed establishment in Belgium.
- However, following a tax inspection in 2017, the tax authority ordered Cabot Plastics to pay VAT and fines for services provided to Cabot Switzerland between 2014 and 2016, stating that Cabot Switzerland had a fixed establishment in Belgium.
- Cabot Plastics brought an action against this decision before the Court of First Instance in Liège, which upheld the application in part, holding that Cabot Switzerland had a fixed establishment in Belgium but annulling the order to pay the fine.
Questions
Three questions regarding the interpretation of Article 44 of the VAT Directive and Article 11 of Implementing Regulation No 282/2011 in relation to
- whether a taxable person established outside the EU should be deemed to have a fixed establishment in a Member State if they receive services from a separate but legally independent entity within the same group,
- whether a taxable person can have a fixed establishment through the use of resources provided exclusively by a service provider within the same group, and
- whether a taxable person has a fixed establishment in a Member State if they receive ancillary or additional services from a service provider in that Member State which contribute to the completion of sales made by the taxable person outside the EU but giving rise to taxable supplies of goods in that Member State.
Decision
A taxable person receiving services from a provider established in a Member State does not have a fixed establishment in that state if they do not have the necessary human and technical resources to constitute one, even if they receive tolling services and ancillary services contributing to their business in that state. This is according to Article 44 of Council Directive 2006/112/EC, as amended by Council Directive 2008/8/EC, and Article 11 of Council Implementing Regulation (EU) No 282/2011.
See also
