- Case C-533/22 – Adient is currently pending with the European Court of Justice (ECJ)
- The case focuses on the concept of fixed establishments in the EU
- A fixed establishment is where business activities can take place with a sufficient degree of permanence
- For VAT purposes, a business must have sufficient human and technical resources in another country to have a fixed establishment there
- Typically, fixed establishments apply when the same legal entity trades in a different jurisdiction
- Tax authorities in the EU have taken the view that separate legal entities can become fixed establishments if they work closely together
- The Adient case is the latest development in a series of cases on fixed establishments
- A subsidiary becoming a fixed establishment for the parent entity could lead to VAT obligations in that country
- Fines, penalties, and interest can be applied by tax authorities for late payment of VAT obligations.
Source: essentiaglobalservices.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.
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