- Tax authorities are increasing scrutiny on intragroup transactions in the banking sector, especially regarding transfer pricing (TP) and value added tax (VAT).
- The CJEU’s Arcomet case ruled that intragroup payments, including TP adjustments, may be considered taxable supplies of services for VAT purposes.
- Banks must assess intragroup arrangements under both OECD TP Guidelines and VAT Directive, as well as local regulations like the Luxembourg CSSF Circular.
- Intragroup services are those that provide real economic benefit to the recipient and must be charged at arm’s length; examples include treasury, IT, HR, and risk management.
- Proper identification and documentation of intragroup services are essential for compliance with tax, VAT, and regulatory requirements.
Source: ey.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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