ECJ: VAT Applies to Transfer Pricing Adjustments and Proof Requirements for Input Tax Deduction

The European Court of Justice (ECJ) ruled that transfer pricing adjustments can constitute consideration for services subject to VAT.
Tax authorities may require evidence beyond invoices to justify input VAT deduction, as long as such requirements are necessary and proportionate.
The case involved Arcomet Towercranes SRL (Romania) and its Belgian parent, with disputes over VAT treatment of intra-group payments following transfer pricing adjustments.
Romanian tax authorities denied input VAT deduction due to insufficient proof that the invoiced services were actually provided and used for taxable transactions.
The ECJ clarified the conditions under which transfer pricing adjustments are subject to VAT and the documentation required for input VAT deduction.

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.