VAT Deductibility and Transfer Pricing: Lessons from Weatherford Atlas Gip SA

• The case involves Weatherford Atlas Gip SA, a Romanian subsidiary of the Weatherford Group, which acquired Foserco SA through a merger.
• Foserco SA received administrative services from affiliated companies outside Romania, with VAT accounted for under the reverse charge mechanism.
• The Romanian tax authorities rejected Weatherford Atlas Gip SA’s VAT deduction claim, citing lack of necessity, unclear beneficiary, and deficient documentation.
• The case was referred to the CJEU for a preliminary ruling.
• The key legal issues are VAT deductibility under the EU VAT Directive and transfer pricing principles.
• The right to deduct VAT is a fundamental principle under the EU VAT Directive.
• The principle of VAT neutrality ensures that VAT is ultimately borne by the final consumer.
• The CJEU’s ruling in the Weatherford Atlas Gip SA case has significant implications for businesses engaged in intra-group transactions.

Source: vatabout.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.

---

---