- The Court of Justice of the European Union (CJEU) ruled that inter-company transfer pricing payments based on the transactional net margin method, as outlined in the OECD Transfer Pricing Guidelines, are subject to value added tax (VAT). The case involved a subsidiary in the crane rental sector and its parent company, where profit margins were adjusted annually through invoicing. The CJEU determined that such payments constitute a supply of services subject to VAT, requiring a legal relationship with reciprocal performance and remuneration as actual consideration for an identifiable service.
Source: kpmg.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.
Latest Posts in "European Union"
- CJEU Ruling: VAT Treatment of Transfer Pricing Adjustments Between EU Member State Companies
- European Commission launches three new CBAM Calls for Evidence
- Comments on ECJ C-726/23 (Arcomet) – VAT Applies to Transfer Pricing Adjustments, Clarifying Deduction Requirements
- EU Sugar Taxes: Diverse Approaches to Reducing Sugary Drink Consumption Across Member States
- Transfer Pricing and VAT Post-Arcomet: Unresolved Debates in Taxation’s Complex Landscape
