Transfer Pricing and VAT Post-Arcomet: Unresolved Debates in Taxation’s Complex Landscape

• Transfer Pricing and VAT are complex areas in taxation, often requiring careful navigation.
• Case C-726/23 involved the interaction between Transfer Pricing adjustments and VAT, referred by a Romanian court to the CJEU.
• The CJEU provided guidance on VAT treatment for intercompany transactions with transfer pricing adjustments.
• Transfer Pricing focuses on enterprise profits, while VAT applies to individual transactions.
• A direct link between consideration and goods or services is necessary for VAT applicability.
• Price adjustments can have VAT implications, as seen in the World Comm Trading case.
• The case involved Arcomet RO, part of the Arcomet group, and its transfer pricing invoices from the Belgian parent, Arcomet BE.
• Arcomet BE initially reported invoices as intra-Community supplies, later correcting them to services.
• Romanian tax inspectors viewed the invoices as management services and denied input VAT deduction due to lack of proof and necessity.
• Arcomet RO challenged the assessments, leading to preliminary questions referred to the CJEU.
• The Romanian court sought clarification on specific articles of the VAT Directive 2006/112/EC.

Source: vat-consult.be

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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