Bridging the Gap between Transfer Pricing and VAT – What Does Recent EU Case Law Bring Us?

The authors examine the evolving interplay between value added tax (VAT) and transfer pricing (TP) in the European Union, focusing on recent CJEU rulings including Arcomet Towercranes, Högkullen AB and Weatherford Atlas. They highlight how intra-group services priced under TP mechanisms can trigger VAT, clarify when bundled services should be treated as distinct supplies and reinforce the importance of robust documentation, transparent cost allocation and alignment of TP and VAT policies for multinational groups. They provide practical guidance for businesses and advisers to navigate compliance, mitigate disputes and preserve input VAT recovery.