Transfer Pricing Adjustments: Will They Create Diverse VAT Implications? Insights from Stellantis Portugal Case

• The Advocate General’s opinion in case C‑603/24 Stellantis Portugal suggests that the VAT effects of transfer pricing adjustments will depend on specific circumstances, not a universal rule.
• The case involved Stellantis Portugal adjusting vehicle purchase prices based on actual operational profits, with transfer pricing adjustments documented as VAT-neutral, but Portuguese tax authorities disagreed.
• The Advocate General outlined several possible VAT outcomes for transfer pricing adjustments, depending on the nature and documentation of the adjustment.
• Adjustments may trigger VAT if they represent actual services, have no VAT impact if made solely for profit allocation between countries, or require corrective invoices if they alter the price of goods or services.
• Other methods of transfer pricing adjustments, such as those based on profitability indicators, may also exist and have different VAT implications.

Source: mddp.pl

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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