- Advocate General Kokott has considered Romania’s attempt to identify Adient Romania as a fixed establishment of Adient Germany
- Adient Romania would have to charge Romanian VAT on its toll manufacturing services if it was considered a fixed establishment
- The CJEU has previously stated that a subsidiary could operate as a fixed establishment of its parent, but the concept should not be applied too broadly
- The fact that two companies belong to the same corporate group cannot support the approach of considering one as a fixed establishment of the other
- The nature of the onward supply or the ultimate destination of the goods is not relevant in determining if an entity is a fixed establishment
- The question is whether Adient Romania has made resources available to Adient Germany, rather than providing services
- Even if Adient Germany had a fixed establishment in Romania, the tax authorities needed to be able to identify it as the relevant establishment
- The business establishment (head office) is generally preferred over a fixed establishment for identifying a customer’s location
- Using a fixed establishment is an exception to this rule and only becomes relevant if it is taking the place of the head office and performing its functions in relation to certain supplies
- The power of tax authorities to identify group entities as representing establishments of others is relatively limited.
Source: taxscape.deloitte.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
