- On June 29, 2023, the Court of Justice of the European Union issued a preliminary ruling in case C-232/22 Cabot Plastics Belgium SA against État belge (Belgium) regarding a Fixed Establishment in the manufacturing industry.
- The case concerned the provision of production services on entrusted material and other ancillary services by Cabot Plastics Belgium SA to a legally independent but related company, Cabot Switzerland.
- The tax authorities recognized that Cabot Switzerland has a permanent place of business in Belgium, and therefore the place of performance and taxation of the services was Belgium.
- Cabot Plastics disagreed and appealed, leading to the case being brought before the Court of Justice of the EU. The CJEU ruled that a taxable person who is a recipient of services does not have a fixed establishment in the Member State where there is a legally separate entity providing the services if it does not have an appropriate structure there in terms of personnel and technical facilities, which may constitute a permanent place of business.
- The judgment will strengthen the changing line of interpretation regarding the fixed place of business for VAT purposes in the structures of toll manufacturing.
Source Deloitte Poland
See also
- ECJ C-232/22 (Cabot Plastics Belgium) – Judgment – Toll manufacturing with ancillary services does not lead to Fixed Establishment
- Summary of ECJ-232/22 (Cabot) – No fixed establishment due to lack of human and technical resources even if ancillary services are performed, exclusivity
