If a company has access to the resources of a subsidiary abroad, it does not yet have a permanent establishment abroad for VAT purposes.
A German AG was part of a group that regularly sold pharmaceutical products to wholesalers in Romania. The AG owned 95% of the shares in a German GmbH, which in turn held all the shares in a Romanian company. The AG was the only customer of the Romanian company. The Romanian company undertook to settle advertising, information and promotion issues in the name and on behalf of the AG. It would also take orders from Romanian wholesalers and take care of the AG’s invoices. The AG paid a monthly expense allowance plus surcharge for this. The Romanian company assumed that it provided these services in Germany. Therefore, it did not charge the AG with Romanian VAT.
Source Taxence
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