The Swedish Tax Agency has issued a new position statement regarding the establishment of a permanent establishment for sellers who transfer goods to call-off warehouses in Sweden. The agency considers that a warehouse owned or rented by the seller, even if run by hired staff or another company, constitutes a permanent establishment.
This position replaces the agency’s previous stance and is in line with the VAT Committee’s guidelines.
The VAT Committee has provided guidelines on the simplification of arrangements for call-off provisions, including when a supplier is considered to have a fixed place of establishment.
Source: Skatteverket
Note from the editors: this position reminds us of several ECJ Cases. For example, ECJ C-931/19 (Titanium) in which the ECJ decided that a property that is rented-out by a non-resident business does not constitute a fixed establishment, if the non-resident business does not have his or her own staff to perform services relating to the rental.
Another example is ECJ C-605/12 (Welmory), which by many people is seen as a result-focused decision (combating fraud). In this case, the ECJ decided that the non-resident business had a fixed establishment, even though he did not have its own staff in the country where the activities took place.
Next week (29 June 2023) we expect the ECJ to decide in a Belgian case (ECJ C-232/22 (Cabot Plastics Belgium)), in which a Swiss principal entity has a toll-manufacturing location in Belgium, whereby the question has arisen if the toll manufacturing activities create a fixed establishment for VAT.
More on Fixed Establishments can be found HERE.
