Comments on ECJ C-726/23: EU Court Advocate General: Transfer Pricing-Based Fees Fall Within VAT Scope

• The Advocate General of the European Court of Justice concluded that fees based on transfer pricing policy fall within the scope of VAT.
• Arcomet, a crane rental company headquartered in Belgium, has group entities in the EU, including Romania.
• A transfer pricing agreement was made between the Belgian headquarters and the Romanian entity for services like fleet management and supplier negotiations.
• Fees were calculated using the Transactional Net Margin Method from OECD guidelines.
• The Romanian entity paid and deducted VAT on invoices from the Belgian headquarters, but the Romanian tax authority denied the VAT deduction.
• The Advocate General stated that whether fees fall under VAT depends on the specific case.
• It must be determined if there is a legal relationship with mutual services and if the fee is the actual value for a specific service.
• The agreement between the Belgian headquarters and the Romanian entity involves services and a fee arrangement.

Source: meijburg.nl

See also

• ECJ C-726/23 (Arcomet Towercranes) – AG Opinion – Transfer Pricing Adjustment for intra-group services subject to VAT; documentation required
• Briefing Document: Advocate General’s Opinion in Case C-726/23 (SC Arcomet): VAT, Transfer Pricing and Intra-Group Services

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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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