On June 10, 2022, the VAT Expert Group raised concerns on the uncertainty for businesses related to the interpretation of the concept of ”Fixed Establishments” the European Union. It urges the European Commission to find a solution that works for all parties involved in order to increase legal certainty and safeguard VAT revenues.
”In this document, the VEG discussed specific issues regarding the current interpretation of the concept of fixed establishment, as well as a future ‘proof’ approach to this concept. In the opinion of the VEG, the specific issues (Section 3 and Annex) raised should be clarified in the short term in order to create a higher degree of legal certainty for businesses and administrations.
We have put forward an approach to start working on the key building blocks for this topic (see Annexes), that could result in clear rules to be set out in a VAT Implementing Regulation or through unanimously adopted VAT Committee guidelines. The future of the concept of fixed establishment, the relationship with the concept of permanent establishment in direct taxation and the more fundamental overarching issues will probably take more time. At the same time, we should seize the moment now and address these fundamental topics.”
Source VEG 108 – VEG opinion on Fixed Establishments
See also ECJ cases on Fixed Establishments (Art. 44 & 45)
