- Increased Regulatory Focus: Tax authorities in the EU are increasingly linking transfer pricing adjustments to VAT assessments, raising concerns for businesses about potential retrospective VAT liabilities due to non-compliance with VAT regulations.
- CJEU Case Law Insights: Recent cases, such as Arcomet Tower Crane (C-726/23) and Högkullen AB v. Skatteverket (C-808/23), illustrate the CJEU’s reluctance to clarify the relationship between VAT and transfer pricing, emphasizing the need for careful evaluation of each transaction’s circumstances.
- Proactive Compliance Measures: Companies operating in the EU must review their transfer pricing practices from a VAT perspective to ensure they are not inadvertently treated as taxable supplies, thus mitigating risks of non-compliance and potential penalties.
Source Essentia
See also
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