CJEU – Recent Developments in Value Added Tax 2014

S. 61Taxable Persons: VAT Grouping and Fixed Establishments

Sebastian Pfeiffer

I. S. 62Introduction

In 2014, a number of cases were decided by the CJEU in the area of VAT. However, the number of cases dealing with the definition of taxable persons and public bodies was small. Other than some general remarks on Article 13 of the VAT Directive, the main case to be dealt with in this paper is case C-7/13, Skandia America on the interaction of the VAT grouping option found in Article 11 of the VAT Directive and the findings of the CJEU in its decision FCE Bank on the out-of-scope character of intra-branch supplies of services.

II. Facts of the case

Skandia, a US corporation, has a fixed establishment in Sweden. Skandia acts as the central procurement company for IT services within the Skandia group and provides these services to companies within the group as well as to branches, including the Swedish branch. The Swedish branch had to process the IT services to a final product and provide it both to the Swedish VAT group members and to companies outside of the VAT group. These services were charged with a 5 % mark-up to the costs.

Graphically, the case can be summarized as follows:

Figure 1: Graphical r...