- The ECJ in Stellantis Portugal clarified that transfer pricing (TP) adjustments are not automatically VAT consideration for a separate supply.
- A TP adjustment can be treated as consideration only if there is a direct link to a specific supply or contractual reciprocal service obligation.
- Intra-group profit allocation mechanisms for income tax purposes generally do not, by themselves, create VAT-taxable services.
- TP adjustments may still affect the taxable amount of the original goods or services transaction, potentially requiring VAT corrections.
- Multinational groups should review contracts and documentation to determine whether TP adjustments create VAT implications.
Source: dlapiper.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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