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.
It states that these adjustments are not a provision of a service and therefore should not be subject to VAT.
The VAT gap was over €128 billion in 2023.
It adds to a growing body of legal guidance clarifying that such adjustments between related companies may not trigger VAT.
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Deloitte Luxembourg · 5 days 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.
Meijburg · 9 days ago
The Advocate General’s opinion in the Stellantis Portugal case (C‑603/24) clarifies that transfer pricing adjustments between group companies are to be treated as adjustments to the original prices of earlier sales, not as separate repair services. Consequently, corrective invoices must be issued and the VAT taxable base of those earlier supplies must be adjusted. The final CJEU judgment is expected later in 2026.
Loyens & Loeff · 9 days ago
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 Portugal News · 9 days ago
Portugal’s government has proposed a 6% VAT rate on construction and rehabilitation works for primary residences, targeting urban development projects initiated between September 2025 and December 2029. The measure applies to sales under €648,022 and rentals under €2,300/month, with specific timing and lease conditions, and includes amended reverse‑charge rules and potential VAT refunds for individuals.
Bloomberg Tax · 10 days ago
An Advocate General for the European Court of Justice has opined that transfer price adjustments made by Stellantis Portugal to dealership sales are not subject to VAT, as they are considered alien to VAT law. The opinion, issued Thursday, is not binding on the court, and the ECJ decision remains unscheduled. The case centers on Stellantis's retroactive price adjustments to ensure a basic profit margin for local dealerships.
International Tax Review · 13 days ago
The article outlines how corporate income tax (CIT) and VAT planning, vehicle selection, and structuring choices can materially affect returns on Portuguese real estate investments. It highlights Portugal’s progressive CIT rate reduction, the special tax regime for SICs, and the conditions under which VAT exemptions can be waived to enable VAT recovery while preserving CIT benefits.
