The analysis regarding the imposition of Spanish VAT on the HO-branch services is approached through two main cornerstones:
1. The need to perform an independence test when determining whether a branch may be deemed as independent from its HO for VAT purposes (ECJ’s judgment in the FCE Bank case), not being sufficient to conclude on the basis of the branch not having a separate legal personality from its HO, but rather requiring an analysis of risks assumed by the branch and the means assigned or available for such risk-bearing.
2. The importance of the branch belonging to a Spanish VAT Group (ECJ’s judgment in the Skandia case), in terms of determining that an HO and a branch do not necessarily have to be deemed as a single taxable payer.
Source EY
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