ECJ Case C-726/23: Transfer Pricing Guidelines’ Applicability to VAT Assessed on Case-by-Case Basis

Multinational companies face challenges with national tax rules, especially for internal group services.
OECD guidelines on transfer pricing aim to ensure correct tax bases, prevent double taxation, and reduce disputes.
Transfer prices are the prices for asset or service exchanges within a group, which should align with independent company prices.
Tax authorities can adjust profits if transfer prices do not meet the arm’s length principle.
OECD guidelines offer methods to comply with this principle.
The relevance of these guidelines for VAT is questioned.
Advocate General de La Tour suggests that VAT applicability of transfer pricing should be case-specific.
The transaction in question should be subject to VAT, as the Romanian company failed to prove the necessity of services for taxable activities.
Tax authorities may request additional information beyond invoices to demonstrate deductibility, respecting proportionality.

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.