The Court of Justice of the European Union ruled that transfer pricing adjustments are subject to VAT if there is a detailed contract with specific payment terms, as seen in the case of SC Arcomet Towercranes SRL. The court found that Arcomet’s contract with its Belgian parent company was sufficient to establish reciprocal performance, making the charges subject to VAT and recoverable. The decision highlights the importance of detailed documentation for intra-group charges and suggests that HMRC’s policy on VAT recovery for holding companies may be overly restrictive. Taxpayers must provide evidence of specific services and fees to support VAT recovery claims.
Source: rsmuk.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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