Previous ECJ decisions on the requirements for fixed establishments have raised many questions. The current judgment comes as very welcome news – at least for those taxable persons who procure tolling services for their goods from a service provider in another EU Member State. In the situation which gave rise to the judgment, the ECJ only ruled in favour of a taxable person in a third country. The decision should, however, also be transferable to taxable persons established in an EU Member State. For these cases, the judgment brings clarity and also legal certainty. The grounds on which the ECJ judgment is based are also remarkably detailed, taking up past jurisprudence and putting it into context. Nevertheless, not all outstanding questions have been clarified. Under what conditions does a subsidiary or an affiliated company constitute the parent company’s fixed establishment? Does this constellation even exist at all – also in view of the ECJ’s more recent decisions in Berlin Chemie A. Menarini SRL (C-333/20) and Titanium (C-931/19)? The issue of fixed establishments is extremely complex. In addition, the EU Member States continue to treat the issue differently. While the German tax authorities are rather cautious about the existence and participation of fixed establishments, other countries interpret the requirements very broadly. Companies should therefore keep an eye on developments in this sector.
Source: kmlz.de
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
