- Transfer Pricing Overview: Transfer Pricing governs pricing among related entities in multinational groups, ensuring intra-group transactions reflect arm’s length prices to allocate profits fairly for corporate tax purposes based on functions, risks, and assets.
- VAT Implications of Adjustments: Transfer Pricing adjustments may affect VAT if they involve actual payments linked to specific supplies. The taxable amount for VAT is determined by actual consideration, but adjustments solely for profit alignment without payment changes generally do not trigger VAT.
- CJEU Case and Future Considerations: The pending Arcomet Towercranes case examines the VAT implications of intra-group payments under Transfer Pricing. The outcome emphasizes the need for careful analysis of contractual agreements and economic substance to determine VAT liability, necessitating vigilance from businesses in aligning Transfer Pricing with VAT requirements.
Source Zampa Partners
See also
Click on the logo to visit the website
- Join the Linkedin Group on ECJ/CJEU/General Court VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
Latest Posts in "European Union"
- Comments on ECJ Case C-639/24: Limits on Denying VAT Exemption for Intra-Community Supplies
- European Parliament Analysis: The Role of the Reverse Charge Mechanism in Tackling VAT Fraud
- Mathez Formation: VAT news: the CJEU puts economic reality back at the centre of the game (Feb 6)
- Blog: Navigating Indirect Rebates: A Call for Clarity in VAT Regulations Under ViDA
- Briefing document & Podcast: ECJ C-462/16 – Boehringer Ingelheim Pharma GmbH & Co. KG – Discounts reduce the VAT value of pharmaceutical supplies
