- Recent European and UK cases highlight the growing importance of VAT implications in transfer pricing arrangements.
- Transfer pricing adjustments may or may not be subject to VAT, depending on whether they are linked to specific goods or services.
- Multinationals often overlook the VAT-transfer pricing relationship, risking audits, litigation, and compliance costs, especially in exempt sectors like finance and insurance.
- Specialist advice and thorough documentation can help reduce VAT risks.
- The VAT treatment of transfer pricing adjustments is highly fact-dependent and requires detailed analysis of each transaction.
Source: news.bloombergtax.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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