Greece: VAT treatment of branch and head office (Supreme Administrative Court decision)
The court upheld a company's right to a refund of its VAT credit balance, confirming that a Belgian cooperative's Greek branch and Brussels head office constitute a single taxable person.
The Supreme Administrative Court held in judgement No. 1998/2025 that the Greek branch of a Belgian aeronautical telecommunications cooperative and its Brussels head office constitute a single taxable person for VAT purposes.
As a result, the outputs contracted, costed and invoiced centrally by the Brussels head office to airline members are also treated as outputs of the Greek branch for VAT purposes. This allows the branch to deduct and recover input VAT on its locally incurred expenses without issuing separate Greek invoices.
The court further confirmed that the company carries on an independent economic activity subject to VAT, regardless of its non-profit character, since it provides services for consideration (members’ contributions).
Procedurally, the court found that the cassation appeal's grounds were inadmissible because they did not challenge these fundamental findings of the Court of Appeal (single taxable person and existence of an independent economic activity), but only their consequences (conditions and verification of the refund amount, right of deduction). As these core findings remained unchallenged, the Supreme Administrative Court dismissed the cassation appeal in its entirety and upheld the company’s right to a refund of its VAT credit balance for the 1998 tax year.
For more information, contact a KPMG tax professional in Greece:
Ariel Manika | amanika@cpalaw.gr