An ECJ ruling determined that transfer pricing adjustments could be considered as remuneration for services and thus subject to VAT. This is particularly relevant for taxable persons without full VAT deduction rights. In the case of Arcomet Belgium and its subsidiary Arcomet Romania, a transfer pricing analysis was conducted to ensure compliance with OECD principles. The analysis determined that Arcomet Romania’s profit margin should be between -0.71% and 2.74%. If the margin falls outside this range, financial adjustments are made between the companies. Arcomet Belgium handles strategic and contractual negotiations, while Arcomet Romania manages purchasing, storage, sales, and rentals. The analysis showed Arcomet Romania exceeded the maximum margin, leading to invoices from Arcomet Belgium for the excess amount.
Source: deloitte.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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