- The Advocate General’s opinion in the Stellantis case states that transfer pricing adjustments between related companies, which merely reallocate profits, should not be subject to VAT as they do not constitute a supply of goods or services.
- The opinion rejects the Portuguese tax authorities’ view that VAT is due on such adjustments.
- The VAT treatment of transfer pricing adjustments depends on the specific contractual and factual circumstances, as highlighted by previous ECJ rulings.
- The opinion is nonbinding, and the ECJ’s final judgment will focus on the facts of the case.
- The outcome may impact businesses differently depending on their transfer pricing structures and VAT recovery positions, especially in sectors with limited VAT recovery.
Source: globalvatcompliance.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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