Transfer Pricing and VAT: The Court of Justice’s Role in Bringing Clarity

• The Court of Justice of the European Union is addressing the complex relationship between Transfer Pricing (TP) and VAT.
• The case involves TP adjustments that align the profit of a company with activities and risks according to OECD guidelines.
• The dispute revolves around three invoices issued by a Belgian parent company to its Romanian subsidiary.
• The Romanian tax authorities argue that the invoices relate to management services and request evidence of their necessity.
• The Belgian tax authorities determined that the invoices concern a provision of services.
• The tax inspectors refused the right to deduct VAT for two invoices but retained the collected VAT.

Source: vat-consult.be

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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