Comments on ECJ C-808/23: AG Kokott’s Opinion on VAT and Transfer Pricing Clarified

• AG Kokott’s Opinion on VAT and Transfer Pricing: On March 6, 2025, Advocate General Kokott issued an Opinion in the Högkullen AB case (C-808/23), addressing the interplay between transfer pricing and VAT, particularly focusing on the concept of “open market value.”
• Determining Open Market Value: The Opinion emphasizes that the open market value should be assessed for each individual service provided by a controlling holding company to its subsidiaries, rather than using a compound service approach, which lacks a clear market value.
• Cost Allocation Considerations: If the individual service values cannot be determined, only the VAT-related expenditures allocated to that year’s services should be considered, rather than all costs incurred by the holding company, impacting how open market value is calculated for VAT purposes.

Source

• John Gruson
• Deloitte

See also

• ECJ C-808/23 (Högkullen) – AG Opinion – Management services from a holding company to subsidiaries can have comparable values under Article 72

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