- The case is titled Högkullen and has the reference number C-808/23.
- The application initiating proceedings was lodged on 27/12/2023.
- The source of the question referred for a preliminary ruling is Högsta förvaltningsdomstolen in Sweden.
- The subject-matter of the case is taxation, specifically value added tax.
Source: curia.europa.eu
Articles in the EU VAT Directive
Article 72& 80 of the EU VAT Directive 2006/112/EC.
Article 72
For the purposes of this Directive, ‘open market value’ shall mean the full amount that, in order to obtain the goods or services in question at that time, a customer at the same marketing stage at which the supply of goods or services takes place, would have to pay, under conditions of fair competition, to a supplier at arm’s length within the territory of the Member State in which the supply is subject to tax.
Where no comparable supply of goods or services can be ascertained, ‘open market value’ shall mean the following:
(1) in respect of goods, an amount that is not less than the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time of supply;
(2) in respect of services, an amount that is not less than the full cost to the taxable person of providing the service.
Article 80
1. In order to prevent tax evasion or avoidance, Member States may in any of the following cases take measures to ensure that, in respect of the supply of goods or services involving family or other close personal ties, management, ownership, membership, financial or legal ties as defined by the Member State, the taxable amount is to be the open market value:
(a) where the consideration is lower than the open market value and the recipient of the supply does not have a full right of deduction under Articles 167 to 171 and
(b) where the consideration is lower than the open market value and the supplier does not have a full right of deduction under Articles 167 to 171 and Articles 173 to 177 and the supply is subject to an exemption under Articles 132, 135, 136, 371, 375, 376, 377, 378(2), 379(2) or Articles 380 to 390c;
(c) where the consideration is higher than the open market value and the supplier does not have a full right of deduction under Articles 167 to 171 and Articles 173 to 177.
For the purposes of the first subparagraph, legal ties may include the relationship between an employer and employee or the employee’s family, or any other closely connected persons.
2. Where Member States exercise the option provided for in paragraph 1, they may restrict the categories of suppliers or recipients to whom the measures shall apply.
3. Member States shall inform the VAT Committee of national legislative measures adopted pursuant to paragraph 1 in so far as these are not measures authorised by the Council prior to 13 August 2006 in accordance with Article 27 (1) to (4) of Directive 77/388/EEC, and which are continued under paragraph 1 of this Article.
Questions
- Is it compatible with Articles 72 and 80 of the VAT Directive to consider, when applying national regulations on revaluation of the tax base, that when a parent company provides its subsidiaries with services of the kind at issue in the case, they are always unique supplies whose market value cannot be determined by such a comparison as provided for in the first paragraph of Article 72?
- Is it compatible with Articles 72 and 80 of the VAT Directive to consider, when applying national provisions on the revaluation of the tax base, that a parent company’s entire cost mass, including capital acquisition and shareholder costs, constitutes the company’s cost for the services provided to its subsidiaries, when the parent company’s only activity consists of active management of the subsidiaries and the company has made deductions for all included VAT attributable to its acquisitions?
Source Sweden seeks ECJ ruling on revaluation of tax base for group-wide VAT services
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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.
