The Court of Justice of the European Union (ECJ) ruled that transfer pricing adjustments charged by a principal company to an operating company are considered services within the scope of VAT. The ECJ also stated that tax authorities can request additional evidence to verify that these services were supplied and used for the operating company’s taxable activities. The case involved Arcomet Towercranes, where the Romanian tax authorities challenged the VAT treatment of TP adjustments between Arcomet Belgium and Arcomet Romania.
The ECJ confirmed that such adjustments are payments for services and fall under VAT, and that member states can require supporting documentation to establish a direct link between the purchase and the supply.
Source: taxathand.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.
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
