- Recent developments highlight the intersection between VAT and Transfer Pricing (TP) and the need for attention.
- EU case law currently offers limited guidance on the relationship between VAT and TP charges.
- Three separate cases referred to the CJEU are likely to bring changes in this area.
- The cases involve Romanian companies receiving charges from foreign group companies, with disputes arising over the applicability of reverse charged VAT and the necessity of the services for taxable activities.
- Another case from Sweden focuses on the application of the open market value within VAT, with disagreements regarding the remuneration charged and the inclusion of certain costs.
Soft law sources, such as working papers from the VAT committee and the VAT Expert Group, acknowledge the lack of a consensus on the topic and emphasize the principle of VAT neutrality. However, the application of Article 80 of the EU VAT Directive may impact this principle, and its implementation is optional for Member States.
Source
See also
- C-527/23 (Weatherford Atlas Gip) – Questions – Refusal of the right to deduct if services are not used for taxable transactions
- C-726/23 (Arcomet Towercranes) – Questions – Are Transfer Pricing Settlement invoices a Supply of Services?
- C-808/23 (Högkullen) – Questions – Taxable amount of services provided by a parent company to its subsidiaries
- Remember … VAT Expert Group on Transfer Pricing Adjustments – Paper/Opinion issued on April 18, 2018
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
