- Fernando Matesanz of Spanish VAT Services reports on a pronouncement by an EU member state on the impact that transfer pricing adjustments have on the VAT applied to transactions.
- The implications of adjustments made due to transfer pricing policies for VAT have traditionally been controversial.
- The interaction of some adjustments for transfer pricing and VAT is a fact because they involve the modification of the taxable amount of a previous transaction, mainly referring to voluntary compensating adjustments.
- Voluntary adjustments can be assigned to specific transactions and affect the taxable base, while other adjustments that do not affect the consideration should not have an impact on VAT.
Source International Tax Review
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