Connections between companies do not determine where VAT is located

• Juliane Kokott, Advocate General of the CJEU, believes that the relationship between companies does not determine where VAT is located.
• The opinion of Juliane Kokott is not binding for the CJEU, but it takes into account the guidance of its advocates when issuing judgments.
• The upcoming CJEU judgment on the case will be binding not only for Romania and Germany, but also for other EU countries due to the harmonization of VAT regulations in the EU.
• This will be the fifth CJEU judgment on the issue of permanent establishment and the third since the Polish case in May 2020.
• The case involves a German company that ordered a comprehensive service from a Romanian related entity.
• The Romanian tax authority demanded VAT payment from the German company, considering the Romanian entity as a permanent establishment.
• The Romanian court suspended the proceedings and asked the CJEU whether an independent company can be considered a permanent establishment of another entity just because they belong to the same group.
• Juliane Kokott argues that two companies belonging to the same group are separate taxpayers.

Source: podatki.gazetaprawna.pl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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