- The recent opinion from the Advocate General of the Court of Justice of the European Union clarifies the VAT position of UK businesses outsourcing work to affiliates in the EU.
- If supported by the court, this finding may make it harder for EU tax authorities to penalize foreign businesses for creating a ‘fixed establishment’ in an EU member state for VAT purposes.
- This is important because it could impact whether foreign businesses need to register for VAT in that EU member state and pay local VAT on outsourcing fees.
- Recent case law, such as the 2022 judgment in the case of Berlin Chemie, has raised concerns for businesses outsourcing manufacturing.
Source RSM
- Summary of AG Opinion in ECJ C-533/22 (Adient) – The same means cannot be used at the same time to provide and receive the same services
- ECJ C-533/22 (Adient) – AG Opinion – Fixed establishment solely on the basis that the two companies belong to the same group?
- Roadtrip through ECJ Cases – Focus on ”Fixed Establishments” (Art. 44 & 45)
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
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