The ECJ takes a clear position that subsidiaries should not constitute a fixed establishment of another group company acting as principal. Even in the situation where the subsidiary is exclusively providing tolling services to that principal, the subsidiary is acting for its own risk and account and remains responsible for the staff and resources it uses. The principal cannot dispose of the staff and resources of the subsidiary as its own. By not recognizing a fixed establishment for a typical toll manufacturer, the ECJ gives much welcomed certainty for multinationals operating in such and similar structures.
Source: loyensloeff.com
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
