- A branch and head office are usually one taxable person under FCE Bank, so internal charges between them are outside VAT.
- This changes under Skandia and Danske Bank if one side is in a local VAT group, making intra-entity charges taxable.
- A subsidiary is always a separate legal entity, so parent-subsidiary transactions are normal taxable supplies under VAT rules.
- Branches use special input VAT attribution methods, while subsidiaries recover VAT based on their own activities.
- Confusing branches with subsidiaries can cause VAT compliance errors and missed VAT recovery opportunities.
Source: vatit.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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