By Estefania Lopez Llopis (Universidad de Alicante)
Skandia America (USA) (Case C-7/13) can be considered one of the most important judgements of the CJEU in the field of VAT grouping. The case deals with a non-EU company, established in the United States, that supplies services to its Swedish branch, member of a VAT group in Sweden. According to the Court’s decision, the consideration of the group as a single taxable person implies a break in the legal relationship between the Swedish fixed establishment (FE) and its non-EU (i.e. the US) head office. This ‘legal separation’ makes it impossible to consider those two entities as a single taxable person for VAT purposes, so that the services supplied from the head office to its FE – which cannot be regarded as supplied to the FE, but to the group itself – must fall within the scope of VAT. As the CJEU has recently reinstated in Kaplan International colleges UK (Case C-77/19), this conclusion is just the ultimate consequence of the single taxpayer principle on which Article 11 of the VAT Directive relies.
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