- The case concerns whether Mercedes-Benz’s free provision of tooling to Romanian sub-suppliers should be treated as a taxable supply of services for VAT purposes.
- Romanian tax authorities argue that the free use of tools constitutes a taxable supply under Article 26(1)(b) of the EU VAT Directive, as the tools are used in Romania for production benefiting Romanian activities.
- Mercedes-Benz contends that the tools are used exclusively for its own business, ownership remains with Mercedes, and no direct invoicing relationship should be required for VAT exemption.
- The ECJ is asked to clarify if such free-of-charge provisions, even with intermediaries involved, are taxable supplies under EU VAT law.
- The outcome will impact VAT treatment for businesses providing tooling in cross-border EU supply chains and could affect VAT liabilities and input VAT recovery.
Source: meridianglobalservices.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.
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