Advocate General rejected tax authority’s application of revaluation rules
The Advocate General of the Court of Justice of the European Union (CJEU) today issued an opinion that the various administrative services that a holding company provides to its subsidiaries (e.g., (business management, finance, property management, information technology (IT), and personnel administration) are not unique services for which there is no comparable market value. The market value of such support services for value added tax (VAT) purposes must therefore be determined on the basis of a comparable price.
The Advocate General further stated that the holding company's costs for providing support services is not relevant to determining the market value.
The case is: Högkullen (C-808/23)
KPMG observation
The Swedish tax authority has consistently taken the position that the value of support services for VAT purposes must equal a holding company’s costs in providing such services and has sought to apply the revaluation rules in such cases. The Advocate General has rejected that approach and is clear on the point that the mere fact that a company's input VAT exceeds its output VAT does not mean that tax evasion or tax avoidance is presented.
Read a March 2025 report (Swedish) prepared by the KPMG member firm in Sweden