- 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.
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