European Union Gazettes ECJ Preliminary Ruling on VAT Deductions for Intra-Community, Intra-Group Transactions

The European Union Official Gazette Oct. 27 published the European Court of Justice (ECJ) preliminary ruling for Case No. C-726/23, on the VAT deduction rules for intra-community transactions between related companies. The taxpayer, a Romanian subsidiary in a multinational group, was denied input VAT deductions on invoices from its parent due to insufficient documentation. Upon request for preliminary ruling, the ECJ held that Directive 2006/112/EC on the common system of VAT must be interpreted as meaning that: 1) remuneration for intra-group services calculated using the transactional net margin method under the OECD Transfer Pricing Guidelines constitutes consideration for a supply ...