The Advocate‑General has clarified that transfer‑pricing (TP) adjustments made for direct tax purposes do not attract VAT, but TP adjustments that are contractually agreed within intra‑group supplies of goods are within the scope of VAT. In the Stellantis Portugal case (C‑603/24), the Portuguese tax authorities imposed VAT assessments on Stellantis Portugal for TP adjustments, and the Advocate‑General advised the European Court that such adjustments should be treated as price adjustments for vehicles. Businesses are urged to review their TP policies and implement VAT considerations in their ERP systems.
The Advocate‑General advised that TP adjustments made by tax authorities for direct tax purposes do not attract VAT, but that TP adjustments that are contractually agreed within intra‑group supplies of goods fall within the scope of VAT.
The case is C‑603/24, and the Advocate‑General has advised the European Court that TP adjustments made by tax authorities for direct tax purposes do not attract VAT, but that TP adjustments that are contractually agreed within intra‑group supplies of goods fall within the scope of VAT.
They imposed VAT assessments on Stellantis Portugal for the TP adjustments.
Businesses should analyze the VAT aspects of their group’s TP policies and implement these considerations in their ERP systems.
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Bloomberg Tax · 4 days ago
The article examines how transfer pricing adjustments can trigger VAT when they are considered payment for goods or services, citing the recent Stellantis Portugal Advocate General opinion. It highlights the need for multinationals to conduct structured reviews, document economic rationale, and maintain evidence to mitigate VAT risks, especially in finance and insurance sectors.
Bloomberg Tax · 4 days ago
Bloomberg Tax’s commentary discusses how transfer pricing adjustments can create VAT exposure, citing recent ECJ cases and a Stellantis Portugal Advocate General opinion. It explains that adjustments tied to specific goods or services may be subject to VAT, while purely profit‑based adjustments may not. The article advises multinationals to conduct structured reviews and maintain documentation to mitigate risks.
Bloomberg Tax · 5 days ago
The Advocate General opinion in the Stellantis Portugal case highlights uncertainty over whether transfer pricing adjustments constitute separate supplies of services and thus trigger VAT. The article reviews recent ECJ cases, outlines the need for structured VAT reviews, and stresses the importance of documentation for multinationals, especially those in finance and insurance sectors.
Essential Business · 27 days ago
Portugal’s government has drafted a bill to cut VAT on construction for own permanent housing to 6%, but the Portuguese Association of Chartered Accountants (OCC) deems the proposal unworkable due to its reliance on post‑construction third‑party checks. The bill would apply only to properties for own use with a sale value not exceeding €648,000, and would require contractors to issue zero‑VAT invoices with developers self‑assessing. OCC warns that the uncertainty could force builders to absorb the difference between 6% and the standard 23% rate.
Bloomberg Tax · about 1 month ago
A non‑binding opinion from an EU Court of Justice adviser clarifies that Stellantis Portugal SA’s practice of adjusting sales prices for dealerships does not constitute a service and therefore is not subject to VAT. The opinion adds to a growing body of guidance on VAT treatment of transfer‑pricing adjustments and highlights the European Commission’s focus on closing the €128 billion VAT gap reported in 2023.
Deloitte Luxembourg · about 1 month ago
The article discusses the CJEU Advocate General’s opinion in the Stellantis Portugal case, clarifying that transfer pricing adjustments agreed between parties may affect VAT taxable amounts, while unilateral tax authority adjustments do not. It distinguishes between separate services and contractual price adjustments, noting that a change in taxable amount does not constitute a separate supply of services. The final judgment is pending, expected before summer 2026, giving businesses time to assess implications.
