On 11 March 2021, the Court of Justice of the European Union (CJEU) issued its ruling in Danske Bank (C-812/19) concerning supplies of services from a head office of a company that was part of a VAT group in one EU member state to its branch in another member state. The court confirmed that its previous jurisprudence in Skandia (C-7/13), concerning a branch that joined a VAT group and received services from its overseas head office, has a broad application and that the principles established applied also to the current case. Following the ruling, all situations where one or more establishments enter a VAT group will lead to VAT on recharges for services between the establishments. The case has particular relevance for financial services and insurance businesses that often operate through branch structures and, in certain countries, are obliged to enter into a VAT grouping with affiliated companies.
Source: Deloitte
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