January 2026 – For a long time,
tax authorities and practitioners lived with the growing fear that
every Transfer Pricing (TP) adjustment would automatically trigger
a VAT consequence. However, two recent developments at the CJEU
have provided a much-needed map for this terrain. While the
Court's ruling in Arcomet
(C-726/23) reinforced the transactional nature of
VAT, AG Kokott's recent Opinion in Stellantis
Portugal (C-603/24) suggests a vital stopping point:
VAT cannot simply "swallow" profit-level adjustments.
The Arcomet Standard: VAT follows the transaction,
not the method
The CJEU's judgment in Arcomet sent a
clear message. When a contract includes price remuneration and
revision clauses, using a TNMM-based mechanism, for a given supply,
that lead to a post-supply increase in value, that increase is
intrinsically linked to the original transaction. Therefore, it
must be reflected in the VAT taxable amount. The key here was the
nexus: the adjustment was
