CJEU to Decide if Free Tool Provision in Supply Chains Triggers VAT When Intermediaries Involved

• The ECJ will address whether Mercedes-Benz’s free provision of tools to suppliers for exclusive use in producing car parts constitutes a taxable supply of services under EU VAT law.
• Mercedes-Benz argues the tools are used solely for its business, and the presence of intermediaries does not change the exclusive benefit or business purpose.
• Romanian tax authorities claim that without a direct invoicing relationship, the free provision should be treated as a taxable supply for consideration.
• The case will clarify if a direct invoicing link is necessary to avoid VAT on free tool provision when intermediaries are involved.
• The outcome will impact VAT treatment for tooling and similar supply chain arrangements across the EU.

Source: michaelamerz.org

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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