Transfer Pricing Adjustments and VAT: The Arcomet Case Before the CJEU

11 April 2024

The Arcomet Group case concerns whether transfer pricing (TP) adjustments should be subject to VAT. The Belgian Tax Authorities increased the taxable profits of Arcomet through TP adjustments and argued that these adjustments also constituted payments for services, thereby triggering VAT.

The dispute was brought before the Court of Justice of the European Union (CJEU), which ruled that TP adjustments are not automatically subject to VAT. The Court held that VAT only applies if there is a direct link between a payment and a specific supply of goods or services, along with a clear legal relationship involving reciprocal performance.

Since the TP adjustment in this case did not relate to a clearly identifiable service, the Court concluded that no VAT was due.

Read the Full English Translation.