Comments on ECJ C-232/22: Toll manufacturing – services provided to non-EU customer in the same corporate group – whether recipient has a fixed establishment in the EU – no – taxpayer win

• The case concerns toll manufacturing, where a Belgian toll manufacturer provides processing and other services to Cabot Switzerland, a customer within the same corporate group.
• The dispute is over the place of supply for VAT purposes.
• The taxpayer argues that it is in Switzerland, while the tax authority claims it is in Belgium due to Cabot Switzerland having a fixed establishment there.
• The Court clarifies that the existence of a fixed establishment depends on the degree of permanence and control over resources by the receiving company, and not on legal status or number of customers.
• It also emphasizes that the place of supply should be determined by reference to the receiving company, not the provider. The Court leaves it to the referring court to determine the place of supply in this case.

Source KPMG

See also

• ECJ C-232/22 (Cabot Plastics Belgium) – Judgment – Toll manufacturing with ancillary services does not lead to Fixed Establishment
• Summary of ECJ-232/22 (Cabot) – No fixed establishment due to lack of human and technical resources even if ancillary services are performed, exclusivity

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