DPH u podpůrných služeb poskytnutých dceřiným společnostem holdingem

The Advocate General, in her opinion on case C-808/23 Högkullen, presented several interesting insights regarding the application of VAT on services provided by a holding company. We discussed these in more detail in our article in April HERE.

To recap, the case involved a Swedish holding company that provided support services to its subsidiaries with limited entitlement to VAT deductions. The tax authorities did not like the fact that the holding company only paid VAT from the value of the services provided to the subsidiaries, which was determined using the cost-plus method.

In its decision, the Court of Justice of the European Union (CJEU) agreed that services provided by the holding company cannot always be considered a single supply, even if invoiced as a single amount. According to the CJEU, individual services must be valued separately. If comparable services exist in the market, the determination of the usual price using a comparative method cannot be ruled out. Unfortunately, the CJEU did not comment further on the Advocate General's additional insights.

Nevertheless, the CJEU's decision should be of interest to holding companies providing support services to their subsidiaries, particularly in situations where the subsidiaries do not have full entitlement to VAT deductions. In light of the CJEU's conclusions, it is essential to consider whether the parent company is correctly claiming VAT deductions on costs related to the services it provides to the subsidiary and whether it has accurately determined the tax base for these services.

Last but not least, the decision highlights the interconnection between transfer pricing and VAT, where a relatively straightforward decision in one area can have significant implications in another. We therefore recommend taking all potential tax aspects into account when considering intra-group transactions.

Authors:

Jakub Kašuba

Michaela Kleinpeterová