Advocate-General: TP Adjustments May Have VAT Implications

The Advocate-General has advised the European Court that transfer pricing adjustments that are contractually agreed within the framework of intra-group services may result in a consideration for a supply of services which is inside the scope of VAT. In his much-anticipated opinion, the Advocate-General discusses the potential VAT aspects of transfer pricing adjustments.

Key insights

• TP adjustments which are contractually agreed within the framework of intercompany services can be within the scope of VAT as a consideration for a supply of services according to the advice of the Advocate-General. Businesses may be confronted with additional compliance obligations if this advice will be followed by the European Court.