- The case involves a Swiss company (Cabot Switzerland) selling carbon-based products, which has a toll manufacturing agreement with a Belgian-based entity of the same group (Cabot Plastics).
- Cabot Plastics processes raw materials owned by Cabot Switzerland into products used for manufacturing plastics and stores end products until they are sold by Cabot Switzerland. Cabot Switzerland is VAT registered in Belgium for the purchase of raw materials and sale of end products.
- Cabot Plastics also provides extra services to Cabot Switzerland.
- The Belgian VAT Authorities argued that Cabot Switzerland should be considered fixed established for VAT purposes since it uses Cabot Plastics’ technical and human resources exclusively.
- However, the ECJ held that a foreign company cannot be deemed to have a fixed establishment where the resources belong to the group company providing services but are used almost exclusively to provide services to the foreign company.
- Therefore, Cabot Switzerland does not have a fixed establishment in Belgium.
Source VATsquare
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
