- Non-VAT Remuneration: The NSA ruled that payments made between related companies due to not achieving a predetermined level of profitability do not constitute remuneration for services and are therefore not subject to VAT.
- Link to Profitability: Such payments are viewed as adjustments related to transfer pricing aimed at aligning a company’s profitability with arm’s length standards, rather than payments for specific services rendered, which means they do not require VAT documentation.
- Judgment Context: The ruling emphasizes that without a clear connection between the transfer of funds and the provision of services, these payments cannot be classified as remuneration for readiness to perform a function, reinforcing that they are contingent upon profitability levels rather than service fulfillment.
Source Ewelina Stamblewska-Urbaniak
