Supreme Court Clarifies VAT Rules for Employee Secondment Under Previous Legislation

• The Court of Cassation addressed the VAT rules on personnel secondment prior to the new regulations introduced by DL 131/2024.
• VAT applies to service provision when there is a reciprocal link between the service provided and the amount received, even without profitability.
• It is up to the trial judge to determine if the payment by the seconding company is a condition for the personnel secondment and if the amounts paid are solely for the secondment.
• The Court of Cassation referenced the EU Court of Justice ruling from March 11, 2020, stating that a service is subject to VAT if payments and secondments are mutually conditional.
• The ordinance emphasizes that the agreed compensation amount is irrelevant, whether it is equal to, greater than, or less than the costs incurred by the service provider.

Source: eutekne.info

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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