- AG Kokott issued an opinion on the concept of VAT fixed establishment in the case of SC Adient Ltd & Co. KG
- Adient DE, a German company, engaged Adient RO in Romania for manufacturing and assembly services
- Adient DE had a Romanian VAT number but was not registered as a VAT fixed establishment in Romania
- Adient RO did not charge Romanian VAT to Adient DE due to the reverse charge mechanism
- Romanian tax authorities argued that Adient RO should have charged Romanian VAT to Adient DE
- AG Kokott opined that even if Adient DE had a fixed establishment in Romania, services should not attract Romanian VAT
- AG reasoned that an independent company cannot be considered a fixed establishment of another independent company
- AG also stated that a services agreement does not necessarily mean a taxable transaction in favor of a fixed establishment
- Different outcomes may occur if the contractual arrangement involves provision of resources necessary for on-site services
- AG concluded that no abusive practices existed in this case as Adient DE could deduct Romanian VAT charged by Adient RO
Source: loyensloeff.com
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.
