- Transfer pricing adjustments in international business are common but their VAT implications are unclear.
- The Advocate General of the European Court of Justice issued an opinion on a specific case involving a Belgian company and its Romanian subsidiary.
- The case involved margin adjustments being treated as remuneration subject to VAT.
- The opinion emphasized that each transfer pricing adjustment case should be analyzed individually.
- The case involved a crane rental group where the Romanian company received services from the Belgian parent company.
- The Romanian tax authorities denied VAT deductions due to lack of evidence of service provision.
- The Advocate General stated that financial flows between related entities do not automatically determine VAT obligations.
- It is important to assess if services have a real character, are provided to a specific beneficiary, and have a clear link to remuneration.
Source: mddp.pl
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.
