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ARTICLE · 13 JULY 2023

InDisputes: CJEU's Decision On 'Fixed Establishment' For VAT Purposes

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On 29 June 2023 the Court of Justice of the European Union ("CJEU") published its decision in Cabot Plastics (C-232/22), which is the latest in a series of recent decisions addressing the concept...

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Matthew Broadstock
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Dara Higgins
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On 29 June 2023 the Court of Justice of the European Union ("CJEU") published its decision in Cabot Plastics (C-232/22), which is the latest in a series of recent decisions addressing the concept of a fixed establishment ("FE") for VAT purposes.

As the EU legislative provisions concerning FEs1 are drafted in a relatively broad manner, EU Member States have adopted varying interpretations of the test for the existence of an FE and this has given rise to persistent litigation. This decision should contribute to increased certainty for practitioners and tax authorities in this area of VAT law.

Factual background

The case involved a Belgian company, Cabot Plastics Belgium SA, ('Cabot Belgium') which provided toll manufacturing services and ancillary services to an affiliated company, Cabot Switzerland GmbH ('Cabot Switzerland'). The question for the CJEU was whether the toll manufacturing activities of Cabot Belgium (using raw materials owned by Cabot Switzerland

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