Does transfer Pricing Create VAT Liabilities And Reporting Issues?

• Increased Regulatory Focus: Tax authorities in the EU are increasingly linking transfer pricing adjustments to VAT assessments, raising concerns for businesses about potential retrospective VAT liabilities due to non-compliance with VAT regulations.
• CJEU Case Law Insights: Recent cases, such as Arcomet Tower Crane (C-726/23) and Högkullen AB v. Skatteverket (C-808/23), illustrate the CJEU’s reluctance to clarify the relationship between VAT and transfer pricing, emphasizing the need for careful evaluation of each transaction’s circumstances.
• Proactive Compliance Measures: Companies operating in the EU must review their transfer pricing practices from a VAT perspective to ensure they are not inadvertently treated as taxable supplies, thus mitigating risks of non-compliance and potential penalties.

Source Essentia

See also

• VAT and Transfer Pricing – Four recent cases @ ECJ/CJEU – 2 cases decided, 1 AG Opinion issued – VATupdate