VAT Regime of Transfer Pricing Adjustments
Abstract
This article examines the intersections between Transfer Pricing (TP) and Value Added Tax (VAT), focusing on whether TP adjustments are relevant for VAT purposes. While TP is governed by the arm’s length principle, VAT is based on the consideration agreed between the parties, creating significant tensions. Through an analysis of the OECD Guidelines, the EU VAT Directive, and relevant legal doctrine, the paper focuses on the recent Arcomet case judged by the Court of Justice of the European Union (CJEU), concluding that a TP adjustment falls within the scope of VAT when it constitutes consideration for a specific supply of goods or services, and when a direct link exists between the adjustment and an identifiable supply
Fields of Study & Subjects
Taxation and Legal Issues
Corporate Taxation and Avoidance
EU Law and Policy Analysis
Publication details
- Journal / source
- EC Tax Review
- Volume
- 35
- Issue
- Issue 1
- Pages
- 36–46
- Publication date
- 19 January 2026
- Language
- EN