- The CJEU ruled in Stellantis Portugal that a transfer pricing adjustment is not automatically VATable as consideration for services; a direct link to an identifiable service must be proven.
- In this case, the evidence did not show such a legal relationship, so the adjustment could not be treated as payment for repair services.
- The court left it to the national court to decide whether the adjustment, together with the agreement and other facts, could instead be seen as a price adjustment for vehicle supplies.
- If it is a price adjustment, national authorities must determine how it affects the VAT taxable amount; the question of whether some TP adjustments fall outside VAT remains unresolved.
- Groups should review intra-group contracts and documentation to assess both arm’s length pricing and VAT consequences.
Source: kpmg.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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