The Court of Justice of the European Union (ECJ) ruled that inter-company transfer pricing payments based on the transactional net margin method, as outlined in the OECD Transfer Pricing Guidelines, are subject to value added tax (VAT). The case involved a subsidiary in the crane rental sector and its parent company, where profit margins were adjusted annually through invoicing. The ECJ determined that such payments constitute a supply of services subject to VAT, requiring a legal relationship with reciprocal performance and remuneration as actual consideration for an identifiable service.
Source: kpmg.com
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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