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‘The concept of Fixed Establishments in VAT is causing quite a stir’

  • Since 2010, there has been extensive debate about the requirements for an establishment to be considered a fixed establishment (VI) in VAT.
  • Tax expert Simon Cornielje discusses the current state of affairs regarding the conditions for the formation or existence of a PE in VAT.
  • The concept of VI has led to numerous questions referred to the Court of Justice of the European Union, resulting in ambiguity and new questions.
  • The discussion is partly fueled by tax authorities in different Member States using the PE concept to claim taxing powers, potentially leading to double taxation for taxpayers.
  • Cornielje also questions whether the staffing requirement for VI still fits in today’s digital age.
  • However, he argues that there is no systematic need to lower the threshold for the concept of VI to meet the requirements of the digital age.

Source Taxlive

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