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An overview from Flick Gocke Schaumburg, Taxand Germany
Recent European case law has brought the VAT consequences of intra-group transfer pricing arrangements and retrospective price adjustments into greater focus.
While transfer pricing determines the allocation of profits between related entities for income tax purposes, VAT focuses on the supply and use of goods and services. This creates important questions around whether balancing payments relate to a taxable supply, how adjustments affect the consideration for VAT purposes, and whether minimum taxable amount or input VAT deduction rules apply.
Dr Andreas Erdbrügger and Leonard Joost from our German member firm, Flick Gocke Schaumburg explore the interaction between transfer pricing and VAT and the potential implications of recent ECJ proceedings, which you can read here.
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