The CJEU has ruled in case C-232/22 that being the sole customer of a service provider does not lead to having a VAT fixed establishment. The case involved a tolling manufacturer in Belgium providing services exclusively to a group company in Switzerland. The Belgian tax authorities claimed that the VAT place of supply of the services was Belgium, but the CJEU ruled that this was not the case. The ruling clarifies that a service provider’s resources are used for its own activities and do not constitute a VAT fixed establishment for another entity, even if they are part of the same group and the latter is its only customer. The reference to “preparatory or auxiliary activities” may also limit the application of the concept of purchase fixed establishments. Another case on the VAT fixed establishment concept (Adient case, C-533/22) is pending at the CJEU.
Source Deloitte
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
