- In June 2016, Weatherford Atlas Gip acquired Foserco SA, a Romanian company, both part of the Weatherford group specializing in oil services
- Foserco had previously acquired general administrative services from other group companies including IT, HR, marketing, accounting, and consultancy
- These services were charged to each group entity based on their share of costs and were supplied by entities outside Romania
- Foserco used the reverse charge mechanism for VAT on these services
- Romanian tax authorities argued that Weatherford Atlas Gip could not deduct input tax for these services as they did not directly link to taxable transactions and benefited the group as a whole
- The CJEU ruled that tax authorities cannot deny input tax recovery if the services are used for the entity’s own taxable transactions, regardless of other group entities also receiving the services
- The CJEU stated it is irrelevant whether the services were necessary or economically profitable as per the EU Principal VAT Directive
- The court emphasized that the allocation of costs should correspond to the services each entity acquired for its own taxable transactions
Source: taxscape.deloitte.com
See also
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.
