- The Court of Justice ruled that compensation for specified group services provided by a parent company to its subsidiary falls under VAT if calculated according to OECD guidelines and exceeds a certain profit margin.
- There must be a legal relationship with mutual obligations, and the compensation must be the actual consideration for identifiable services providing a concrete benefit.
- A direct link between the service provided and the compensation received is required, considering economic and commercial reality.
- The variable nature of compensation does not affect the direct link if the calculation method is predetermined and precise.
- Regarding VAT deduction, tax authorities can require additional documents beyond the invoice to prove services were performed and used for taxable activities.
- The presence of an invoice is necessary for formal purposes, but deduction cannot be denied solely due to formal invoice deficiencies if all necessary data is available.
- Material conditions include the actual performance of services and their use for taxable activities.
- Tax authorities can request evidence but cannot require proof of necessity or economic viability of services for deduction.
- The burden of proof lies with the taxpayer, and required evidence must be necessary and proportionate.
Source: btwjurisprudentie.nl
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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