Comments on ECJ C-808/23: Intra-Group Charges – Establishing the Taxable Amount for VAT Purposes

ECJ Decision Overview: On July 3, 2025, the European Court of Justice ruled in the Högkullen AB case, clarifying that services provided by a parent company to its subsidiaries cannot automatically be classified as a single supply. This decision emphasizes the need for a case-by-case analysis to determine the taxable amount for VAT purposes.
Taxable Amount Determination: The court stated that if comparable services exist in the market, the open market value should be used for VAT assessments instead of relying on the full cost incurred by the parent company. This approach aligns with Article 72 of the VAT Directive, promoting fairness and transparency in intra-group transactions.
Implications for Taxpayers: The ruling requires taxpayers and tax authorities to carefully evaluate intra-group services individually to ascertain proper VAT treatment. The decision indicates a shift away from using full cost as a standard taxable base, encouraging the identification of distinct services with available market comparables.

Source IBFD

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VAT Treatment of Intra-Group Management Services by Holding Companies

The CJEU ruled on the VAT treatment of intra-group transactions in case C-808/23 Högkullen.
Högkullen AB, a Swedish parent company, provided management services to its subsidiaries.
The Swedish tax authority challenged the pricing of these services, arguing they should be considered comprehensive sui generis services.
The authority included all costs, including investment costs, in the VAT tax base.
The CJEU concluded that services provided to subsidiaries are not inherently inseparable and can be assessed individually.
The ruling was favorable to the taxpayer, allowing the use of the comparator method for pricing.

Source: mddp.pl