European Court of Justice Issues Advocate General Opinion on Portuguese VAT, Intra-Group Transfer Pricing

The European Court of Justice (ECJ) Jan. 15 issued an Advocate General opinion for Case C-603/24, regarding the VAT treatment of intra-group transfer pricing adjustments. The taxpayer, a Portuguese vehicle distributor within an automotive group, purchased vehicles using a retroactive purchase price adjustment, based on warranty costs and operating expenses. The Portuguese tax authority treated downward adjustments as consideration for services provided by the taxpayer and assessed VAT. Upon request for a preliminary ruling, the Advocate General opined that Council Directive 2006/112/EC must be interpreted as meaning that: 1) a mere sale price adjustment can’t itself constitute a supply of ...