- The ECJ ruled in the Arcomet Towercranes case that non-transactional profit adjustments between group companies can be considered payment for services and thus fall within the scope of VAT.
- For VAT to apply to transfer pricing adjustments, there must be a direct link between the payment and a specific supply of goods or services.
- The court outlined that a legal relationship, identifiable services, and direct consideration are required for VAT to be due on such adjustments.
- Transfer pricing adjustments may require VAT adjustments if they can be clearly linked to specific transactions.
- Further clarification on VAT treatment of transfer pricing adjustments is expected from the pending Stellantis Portugal case.
Source: news.bloombergtax.com
More information: HERE
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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