VAT effects of year-end transfer pricing adjustments

Ronald van den Brekel*, Herman van Kesteren, Ad van Doesum

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

A recurrent topic of debate concerns the effects of transfer pricing adjustments for direct tax purposes on the taxable amount for VAT. This topic is currently gaining attention, which is underlined by the recently published VAT Committee working paper on the possible VAT effects of transfer pricing adjustments. Focussing on so-called 'year-end transfer pricing adjustments', the authors discuss various fundamental questions concerning the VAT implications of such adjustments. Do year-end adjustments lead to retroactive adjustments to the taxable amounts for VAT of supplies made throughout the year? If any retroactive adjustments need to be made to the taxable amounts for VAT, what are the implications for the VAT returns, EC-Sales lists and interests? What if a year-end adjustment does not lead to an adjustment of the taxable amount for VAT? Can intercompany payments (which follow from year-end adjustments) then be regarded as the remuneration for any service rendered? Or are year-end adjustments merely to be regarded as financial transactions outside the scope of EU VAT after all? These, and other questions are discussed in this article.

Original languageEnglish
Pages (from-to)182-192
Number of pages11
JournalEC Tax Review
Volume26
Issue number4
Publication statusPublished - 2017

Cite this

van den Brekel, R., van Kesteren, H., & van Doesum, A. (2017). VAT effects of year-end transfer pricing adjustments. EC Tax Review, 26(4), 182-192.
van den Brekel, Ronald ; van Kesteren, Herman ; van Doesum, Ad. / VAT effects of year-end transfer pricing adjustments. In: EC Tax Review. 2017 ; Vol. 26, No. 4. pp. 182-192.
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abstract = "A recurrent topic of debate concerns the effects of transfer pricing adjustments for direct tax purposes on the taxable amount for VAT. This topic is currently gaining attention, which is underlined by the recently published VAT Committee working paper on the possible VAT effects of transfer pricing adjustments. Focussing on so-called 'year-end transfer pricing adjustments', the authors discuss various fundamental questions concerning the VAT implications of such adjustments. Do year-end adjustments lead to retroactive adjustments to the taxable amounts for VAT of supplies made throughout the year? If any retroactive adjustments need to be made to the taxable amounts for VAT, what are the implications for the VAT returns, EC-Sales lists and interests? What if a year-end adjustment does not lead to an adjustment of the taxable amount for VAT? Can intercompany payments (which follow from year-end adjustments) then be regarded as the remuneration for any service rendered? Or are year-end adjustments merely to be regarded as financial transactions outside the scope of EU VAT after all? These, and other questions are discussed in this article.",
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van den Brekel, R, van Kesteren, H & van Doesum, A 2017, 'VAT effects of year-end transfer pricing adjustments', EC Tax Review, vol. 26, no. 4, pp. 182-192.

VAT effects of year-end transfer pricing adjustments. / van den Brekel, Ronald; van Kesteren, Herman; van Doesum, Ad.

In: EC Tax Review, Vol. 26, No. 4, 2017, p. 182-192.

Research output: Contribution to journalArticleScientificpeer-review

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AU - van den Brekel, Ronald

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AU - van Doesum, Ad

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AB - A recurrent topic of debate concerns the effects of transfer pricing adjustments for direct tax purposes on the taxable amount for VAT. This topic is currently gaining attention, which is underlined by the recently published VAT Committee working paper on the possible VAT effects of transfer pricing adjustments. Focussing on so-called 'year-end transfer pricing adjustments', the authors discuss various fundamental questions concerning the VAT implications of such adjustments. Do year-end adjustments lead to retroactive adjustments to the taxable amounts for VAT of supplies made throughout the year? If any retroactive adjustments need to be made to the taxable amounts for VAT, what are the implications for the VAT returns, EC-Sales lists and interests? What if a year-end adjustment does not lead to an adjustment of the taxable amount for VAT? Can intercompany payments (which follow from year-end adjustments) then be regarded as the remuneration for any service rendered? Or are year-end adjustments merely to be regarded as financial transactions outside the scope of EU VAT after all? These, and other questions are discussed in this article.

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van den Brekel R, van Kesteren H, van Doesum A. VAT effects of year-end transfer pricing adjustments. EC Tax Review. 2017;26(4):182-192.