Rozsudek SDEU ve věci C-232/22 Cabot Plastics Belgium SA

Judgment of the CJEU in Case C-232/22 Cabot Plastics Belgium SA

Cabot Switzerland ("Cabot CH"), a company based in Switzerland, has entered into a processing contract with Cabot Plastics, a Belgian company with which it is financially linked. Cabot Plastics processes the raw materials to produce plastics for Cabot CH at its facilities and provides several other services, in particular warehousing, quality control, administrative support for customs clearance, etc. These services are provided almost exclusively to Cabot CH.

The Belgian Tax Authorities concluded that the technical and personnel resources of Cabot Plastics were entirely at the disposal of Cabot CH and that the Swiss company therefore had a fixed establishment in Belgium for VAT purposes. According to the Tax Authorities, the services provided by Cabot Plastics should therefore have been taxed in Belgium and not in Switzerland.

The Court of Justice of the EU ("CJEU") largely refers to its recent judgment C-333/20 Berlin Chemie (see our alert on this topic), in which CJEU dealt with a similar dispute. According to the CJEU, the primary place of supply is always the residence of the recipient, as this is a practical and objective criterion. Taxation at the place of fixed establishment, as an exception to the main rule, only comes into play if the main rule does not lead to a rational solution.

As regards permanent technical and personnel resources, the Court observes that a service contract, although exclusive, does not itself have the effect of making the resources of the provider the resources of its customer, because the provider of the services remains responsible for its own resources and provides those services at its own risk. The same resources cannot be used simultaneously to provide services by a Belgian company and to receive services by a Swiss company.

The CJEU concludes that the processing services are received and used by Cabot CH for the economic activity of selling goods in Switzerland, because Cabot CH does not have a structure in Belgium suitable for that purpose.

If you have any questions, please contact the authors of the paper or the members of the EY team with whom you usually work.

Authors:

Jevgenija Bajzíková

Štěpán Kvíz