Sweden: Revaluation of tax base for VAT purposes for group-wide services (CJEU referral)
Supreme Administrative Court (HFD) requested a preliminary ruling from the Court of Justice of the European Union (CJEU)
The Supreme Administrative Court (HFD) requested a preliminary ruling from the Court of Justice of the European Union (CJEU) on the following two questions relating to revaluation of the tax base for value added tax (VAT) purposes for group-wide services to subsidiaries when the tax base consists of the parent company's own costs:
- Is it compatible with Articles 72 and 80 of the VAT Directive to consider, when applying national regulations on revaluation of the tax base, that when a parent company provides its subsidiaries with services of the kind at issue in the case, they are always unique supplies whose market value cannot be determined by such a comparison as provided for in the first paragraph of Article 72?
- Is it compatible with Articles 72 and 80 of the VAT Directive to consider, when applying national provisions on the revaluation of the tax base, that a parent company's entire cost mass, including capital acquisition and shareholder costs, constitutes the company's cost for the services provided to its subsidiaries, when the parent company's only activity consists of active management of the subsidiaries and the company has made deductions for all included VAT attributable to its acquisitions?
KPMG observation
The Swedish Tax Agency consistently believes that an internal group service is always unique and thus that there is no comparable provision on the open market, which leads to an extensive and routine application of the revaluation rules when providing services between parent companies and subsidiaries which have limited or no right of deduction.
Read a January 2024 report (Swedish) prepared by the KPMG member firm in Sweden