This article summarises case law and opinions on fixed establishments for VAT. Specifically, the article highlights the Dong Yang case, particularly the remarks of the ECJ and the AG that the supplier must investigate if the customer has a FE, but there are limitations to how far the supplier must (and can) go with this.
“In the author’s opinion, it is particularly worrying the outright abandonment of the bright pattern relating to legal certainty traced by AG Kokott in favour of a not quite unknown but certainly unstable concept such as the criterion of economic and commercial realities, whose application was not even limited by the Court (again, another blow to AG Kokott) by the existence of abusive practices. It seems fairly easy to predict that tax litigations, as a result of tax authorities being more lenient to deem subsidiaries as FEs “in disguise” of their parent company, would raise (time to institutionalise the VAT Cross-Border Rulings (CBR) pilot project?).”
Source Kluwer International Tax Blog
See also our summary of the Dong Yang case here: ECJ case C-547/18 (Dong Yang) – Judgment – Fixed Establishment for VAT (27 newsletters added)
