AG Kokott Clarifies VAT Treatment of Transfer Pricing Adjustments After Arcomet and Stellantis Cases

• Advocate General Kokott’s Opinion in Stellantis Portugal (C-603/24) addresses the tension between transfer pricing adjustments and VAT, following the Arcomet Towercranes (C-726/23) judgment.
• Arcomet led to many transfer pricing corrections being treated as taxable services for VAT, but Kokott cautions against this broad application.
• Kokott emphasizes that not every transfer pricing true-up or cash flow constitutes consideration for a service under VAT law.
• The legal and economic nature of the adjustment must be established; if it only changes the consideration for an earlier supply, it falls under VAT rules for taxable amounts, not as a separate service.
• The core issue is distinguishing between price adjustments of previous supplies, consideration for new supplies, or payments outside VAT’s scope.

Source: vat-consult.be

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.

---

---