AG Kokott’s Opinion on VAT Fixed Establishment Concept in SC Adient Ltd & Co. KG Case

AG Kokott issued an opinion on the concept of VAT fixed establishment in the case of SC Adient Ltd & Co. KG
Adient DE, a German company, engaged Adient RO in Romania for manufacturing and assembly services
Adient DE had a Romanian VAT number but was not registered as a VAT fixed establishment in Romania
Adient RO did not charge Romanian VAT to Adient DE due to the reverse charge mechanism
Romanian tax authorities argued that Adient RO should have charged Romanian VAT to Adient DE
AG Kokott opined that even if Adient DE had a fixed establishment in Romania, services should not attract Romanian VAT
AG reasoned that an independent company cannot be considered a fixed establishment of another independent company
AG also stated that a services agreement does not necessarily mean a taxable transaction in favor of a fixed establishment
Different outcomes may occur if the contractual arrangement involves provision of resources necessary for on-site services
AG concluded that no abusive practices existed in this case as Adient DE could deduct Romanian VAT charged by Adient RO

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.